Blockchain Technology Current Affairs - 2019
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The central banks of the UAE and Saudi Arabia will launch a common digital currency called Aber. Aber will be used for financial settlements between the two countries through Blockchains and Distributed Ledgers technologies.
Benefits of the Digital Currency
The digital currency would be launched to explore the following benefits:
- The digital currency would aid in studying the impact on the improvement and reduction of remittance costs and the assessments of risks.
- Aber will establish an additional means for the central financial transfer systems of the two countries and enable banks to directly deal with each other in conducting financial remittances.
Initially, the use of the digital currency will be restricted to a limited number of banks. By studying the various technical, economic and legal requirements, the use of the digital currency would be expanded.
Digital Currency Aber relies on the use of a distributed database between the central banks and the participating banks from both sides. Digital Currency is part of the efforts to adopt new technologies like Blockchain, Artificial Intelligence, Internet of Things, etc., in line with the Fourth Industrial Revolution that is reshaping governments and corporates around the world.
The 19th meeting of Financial Stability and Development Council (FSDC) was held in New Delhi under the Chairmanship of Union Finance Minister Arun Jaitley. The meeting was attended by RBI Governor Dr. Urjit R. Patel, SEBI chairman, IRDAI Chairman along with heads and other senior officers of Government and financial sector regulators.
Key Highlights of Meeting
- Economic Review: It reviewed health of economy, both domestic and global, financial sector performance and issues due to rising oil prices. It also discussed issue of real interest rate, current liquidity situation, including segmental liquidity position in NBFCs and mutual fund space.
- Cyber Security in Financial Sector: It also reviewed developments regarding strengthening of Cyber Security in Financial Sector and progress made towards setting up of Computer Emergency Response Team in the Financial Sector (CERT-Fin) under Statutory Framework. It also deliberated on need for identifying and securing critical information infrastructure in financial sector.
- Crypto Currency: It also deliberated on issues and challenges of Crypto Assets and Currency. It was briefed about deliberations of High-level Committee chaired by Secretary (Economic Affairs) to devise appropriate legal framework to ban use o fprivate crypto currencies in India and encouraging use of distributed ledger technology (blockchain), as announced in Budget 2018-19.
- RegTech and SupTech: It also discussed market developments and financial stability implications of use of RegTech and SupTech by financial firms and regulatory and supervisory authorities. It also discussed implementation of recommendations of Sumit Bose Committee on measures, such as promoting appropriate disclosure regime for financial distribution costs.
Financial Stability and Development Council (FSDC)
- FSDC is super regulatory body for regulating financial sector which is vital for bringing healthy and efficient financial system in economy of the country. It was set up in 2010 by then Finance Minister Pranab Mukherjee
- Mandate: To strengthen and institutionalise mechanism of maintaining financial stability, financial sector development, inter-regulatory coordination along with monitoring macro-prudential regulation of economy and promoting financial sector development.
- Composition: Union Finance Minister is chairman of FSDC. Its members are heads of all financial sector regulatory authorities (i.e, RBI, SEBI, IRDA, PFRDA), Chairman of Insolvency and Bankruptcy Board, Finance Secretary and Secretary, Department of Economic Affair; Secretary, Department of Financial Services and Chief Economic Adviser.