Diem Confirms Shutdown as Silvergate Acquires the Project’s Assets

Silvergate Bank confirmed that it’s purchasing Diem’s development, deployment and operations tools, as well as tools “for running a blockchain-based payment network” for remittances and other applications.  The Diem Association, the stablecoin project from Meta Platforms,  will “begin the process of winding down” both the group and its subsidiaries over the next few weeks. Silvergate Bank described Diem’s work as running “in a pre-launch phase.” Silvergate CEO Alan Lane said they hope to launch a stablecoin by the end of this year. [Read more]

India to impose 30% tax on crypto income, CBDC in 2022-2023

India will begin levying a 30% tax on all income from crypto-asset transfers, according to the country’s Finance Minister in her budget speech. The 30% tax rate is double the 15% on short capital gains for stocks, but most crypto holders already fall into the 30% tax bracket. A 1% tax will be deducted at source on payments or fees paid in relation to the transfer of crypto-assets. Also the Finance Minister said that a digital rupee will be issued within the coming tax year ending March 2023. [Read more]

Central Bank of Jordan studying the launch of CBDC

Governor of the Central Bank of Jordan reportedly confirmed that the bank is currently studying plans to issue a central bank digital currency (CBDC). These comments were made during a Lower House Economy and Investment Committee meeting on January 30, 2022. [Read more]

Stablecoins: Growth Potential and Impact on Banking

The Fed published a paper that discusses reserve-backed stablecoins’ impact on bank balance sheets and credit intermediation under plausible assumptions. It finds the impact on traditional banking and credit provision can vary depending on the source of inflow and the composition of stablecoin reserves. Among the various scenarios, a two-tiered banking system can support both stablecoin issuance and maintain traditional forms of credit creation. In contrast, a narrow-bank stablecoin framework is the most stable but at the potential cost of credit disintermediation. [Read more]

Thailand axes planned 15% cryptocurrency tax

Thailand has reportedly scrapped plans to impose a 15 per cent withholding tax on crypto transactions after facing pushback from traders in one of south-east Asia’s biggest markets for digital currencies. Tax officials in the country said on Monday that people who earned income from cryptocurrency trading or mining could report these as capital gains on their income taxes. [Read more]

For those of you that missed this late addition to yesterday’s Daily Digest:

Trends of Issuing Central Bank Digital Currency in the Arab Region

An Arab Monetary Fund survey found that 76% of 17 Arab central banks are studying the possibilities of issuing central bank digital currency (CBDC), and three of them are participating in experiments to issue them. Two are expected to issue a CBDC in the next three years, while 60% of them expect to be able to issue within six years. 69% of Arab central banks are in the process of determining the type of CBDC issue, while 25% of them are involved in projects/studies to issue more than one type of CBDCs. Financial inclusion comes at the top of the motives to issue retail CBDCs, while for wholesale CBDCs it is combating money laundering and terrorist financing. [Read more]

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