Blockchain
GFMA, IIF push back on Basel bank treatment of permissionless blockchain
Last week, the Basel Committee on Banking Supervision (BCBS) closed its December consultation regarding updates to its crypto-asset rules. Five major industry bodies responded, pushing back on the Committee’s plans to treat any permissionless blockchain tokens, including tokenized securities, as equivalent to high-risk cryptocurrencies (group 2). For assets classified in Group 2, banks must set aside significant capital, often a dollar for every dollar of crypto.
Group 1 assets include tokenized traditional securities and eligible stablecoins.
The associations responding include the Global Financial Markets Association (GFMA), the Futures Industry Association (FIA), the Institute of International Finance (IIF), the International Swaps and Derivatives Association (ISDA) and the Financial Services Forum.
Permissionless blockchains
“We note the BCBS’s conclusion that the use of permissionless blockchains gives rise to a number of unique risks, some of which cannot be sufficiently mitigated at present. We respectfully disagree with that conclusion,” the response states.
“The principle should be that, where risks can be managed, the use of public permissionless blockchains to develop tokenized assets should be allowed in order to improve efficiency.”
Hence, they argue that banks are capable of managing the risks. Smart contracts can include the ability to seize, freeze or burn tokens. Additionally, the terms and conditions of a token could give the tokenization agent the right to remove the token from the ledger and issue it in a traditional manner.
They provided an analogy between permissionless blockchains and the internet, where the foundational network is permissionless, but the applications on top of it are often gated or require permission.
“The exclusion of permissionless public networks may impact the wider development of liquid tokenization markets not least due to the potential lack of interoperability between private blockchains,” the Associations said.
They further argued the importance of not disincentivizing banks from participating because it would drive activity towards non-bank financial institutions and shadow banking. In turn, this increases systemic risks.
The associations consider the Basel treatment of permissionless blockchain contrary to technology neutrality and the principle of “same asset, same risk”.
Infrastructure risk add-on
Early Basel Committee proposals planned an infrastructure risk add-on of 2.5% applied to tokenized traditional assets. However, Basel dropped this in the final crypto rules. December’s proposed changes suggested reintroducing it but at a 0% level. Local regulators would have the option of increasing the figure.
The industry associations want to see all references to the infrastructure risk add-on removed.
Failing that, they suggest adopting a proposal of the Hong Kong Monetary Authority (HKMA) as a fallback. It too sets the risk add-on at 0%. Instead of imposing a blanket percentage across the industry, the associations suggest individual treatment. In other words, authorities would only impost the add-on if they identify a specific internal infrastructure risk at a bank.
Settlement finality
In the proposals from Basel last December, there was a clarification that settlement finality should apply to both secondary markets and the issuance of assets. However, the associations have requested that this regulation not be enforced rigidly.
Instead, they point to the evolving legal landscape on this topic. For example, with the changes in the United States Uniform Commercial Code (UCC) and England’s Law Commission review.
Instead, they suggest that a bank should ensure it understands how and when a transaction reaches finality. Additionally, the bank should conduct a legal review. They argue that the foreign exchange market takes a similar approach.
As an aside, the associations note that DLT helps reduce settlement risks.
Stablecoin issues
The industry response covers several stablecoin issues. Firstly, they are concerned about some changes that they believe prevent a bank stablecoin reserve custodian from providing any type of bank account. That’s because of an insistence on the bankruptcy remoteness of all reserves. The associations request the exclusion of cash assets from this requirement.
Still on reserves, they request permission to use reverse repo agreements. Most major stablecoin issuers use them.
Next, they request that stablecoins be allowed to be used as collateral.
Overall, they note that the Basel stablecoin requirements are more onerous than current legislation and frameworks published by the UK, EU, Singapore, Dubai and Hong Kong.
“BCBS’s amendments should not have the effect of preventing banks from exercising rights that have already been enshrined in existing regulatory and legal frameworks,” they wrote.
Additionally, they point to an inconsistency in that banks with e-money licenses are subject to far more stringent requirements for tokenized e-money.
Source: ledgerinsights.com
The post GFMA, IIF push back on Basel bank treatment of permissionless blockchain appeared first on HIPTHER Alerts.
Codego enables effortless fund transfers across 33 countries with SEPA or SEPA Instant, providing a secure and seamless gateway to international payments.
Codego, a licensed EMI/Virtual Asset Operator and banking innovator, has announced the launch of its groundbreaking Cryptogateway solution for merchants. This new platform sets a global standard in digital payment technology, offering unparalleled functionality for both in-person and remote transactions.
The Future of Payments Is Here
Codego’s Cryptogateway enables merchants to accept cryptocurrency payments seamlessly from customers while receiving funds instantly in their IBAN accounts. Accepting payments in Bitcoin, Litecoin, Dogecoin, Ethereum, USDT, and USDC from customers, while allowing merchants to receive settlements in 35 fiat currencies directly into their preferred IBAN accounts, with zero transaction fees, the solution delivers instant, borderless, and cost-effective payment processing.
Merchants can create multiple Terminal IDs at no cost, making it easy to manage different business locations or divisions. This flexibility, combined with cutting-edge technology, ensures a user-friendly experience for businesses of all sizes.
Why Codego’s Cryptogateway Is the Ultimate Solution
The solution is ideal for industries such as gambling and forex, enabling customers to deposit in cryptocurrencies and ensuring instant settlement of funds directly to merchants’ IBAN accounts.
– Zero Fees: Merchants pay no commissions on transactions, maximizing their revenue.
– Instant Settlement: Payments are processed and funds are available instantly, reducing cash flow delays.
– Global Reach: Supports 35 cryptocurrencies, enabling businesses to cater to a wider audience.
– Easy Integration: Multi-terminal setups at no cost ensure seamless adoption.
– Licensed and Secure: Codego operates under EMI/Virtual Asset and banking licenses in multiple jurisdictions, ensuring full regulatory compliance.
“Codego’s Cryptogateway is not just another payment solution; it’s a revolution in how businesses interact with digital assets. We’re empowering merchants to embrace the future of payments without complexity or excessive costs,” saidSimone Binotto Torre, Chief Operating Officer, Codego.
A Trusted Global Partner in Financial Innovation
Codego is renowned for its pioneering role in the financial technology landscape. With banking licenses across multiple countries and a reputation for providing White Label IBAN bank accounts to emerging neobanks, Codego continues to drive innovation. The company operates 11 branches globally, spanning Europe, the Middle East, the United States, and now Oceania. Its expansion reflects a commitment to bringing cutting-edge solutions to every corner of the globe.
Redefining Merchant Solutions
This Cryptogateway launch is part of Codego’s ongoing mission to revolutionize financial services through innovation. From supporting neobanks with White Label solutions to creating customer-centric payment platforms, Codego’s expertise ensures merchants stay ahead in an ever-evolving market.
The post Codego Revolutionizes Merchant Payments with New Cryptogateway Solution appeared first on News, Events, Advertising Options.
Blockchain
Dizzaract Studio Founder Predicts AI Supercycle by 2025; VanECK estimates one million New AI Agents by end of the year
Ilman Shazhaev, founder of Dizzaract Game Studio, predicts that by the end of 2025, Web3 gaming will enter an AI-driven supercycle, where in-game economies will reflect real-world market dynamics powered by AI.Ilman suggests that AI agents will play a key role in this transition, enabling more personalized gaming experiences.
Since October 2024, AI agents have swarmed social media platform X, pumping nearly a dozen more coins past $100-million market capitalizations, largely on Solana. According to Santiment — crypto analytics platform, the launch of AI agent $NOTAI has been one of most talked AI narratives on X this week.
In addition to it, a recent VanECK report also highlights that by the end of 2025, over 1M new AI agents will be deployed, while the total AI agents’ market cap is about $9.72B according to Coingecko data. Additionally, former messari research Kel Eleje analyst also speculates that total market cap for AI agents and technology could rally as high as $250 billion.
Earlier this week, Dizzaract made headlines with its studio launch in the Middle East, where it now employs 160 people. The studio has introduced patented AI frameworks designed to transform traditional gameplay into adaptive, interactive experiences. Dizzaract holds registered patents for an ‘Adaptive Machine Learning Framework for Gaming Assistance’ and a ‘Personalized AI Learning and Training Framework for Gaming Systems.’
On this note, I would like to share comment from Ilman Shazhaev, Founder of Dizzaract Game Studio “I firmly believe that in 2025, gaming will enter what I call the “AI Supercycle.” We’ll see a surge of games that no longer rely on pre-written scripts but instead respond dynamically to players’ actions, decisions, and even emotions in real time. AI is transforming games into adaptive, living worlds that blur the line between gameplay and real life.AI agents will play a central role in this transformation, going beyond automation to offer highly personalized experiences. They’ll analyze player behavior, adjust strategies, and even act as in-game coaches, tailoring challenges and decisions in real time.
In Web3 games, AI agents can manage in-game economies, providing real-time insights and keeping systems dynamic and responsive. By 2025, digital ownership will no longer be optional — it will be a core expectation. Players will own their in-game assets and identities, transferring achievements seamlessly across games while participating in economies that mirror real-world markets. By 2025, digital ownership will no longer be optional — it will be a core expectation. Players will own their in-game assets and identities, transferring achievements seamlessly across games while participating in economies that mirror real-world markets. AI-driven Web3 games will dominate the market by combining immersive gameplay with decentralized economies. In-game economies, powered by AI, will be as dynamic and complex as real-world markets. These games will transcend entertainment, becoming cultural movements where players act as evangelists, with AI-powered avatars serving as extensions of their digital identities.”
The post Dizzaract Studio Founder Predicts AI Supercycle by 2025; VanECK estimates one million New AI Agents by end of the year appeared first on News, Events, Advertising Options.
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