Real-time payments and modernization of ISO 20022 via KPMG and Volante Technologies partnership
Volante Technologies, a global cloud payment and financial messaging provider, and KPMG announced that they will work together to provide comprehensive ISO 20022 and real-time payments (RTP) readiness diagnostics for financial institutions. It is stated that the strategic alliance will enable banks the ability to expedite and modernize their current payment processes and operations.
According to the press release, banks and payment service providers (PSP) can begin to use the Clearing House RTP to launch real-time payments and prepare for the availability of FedNowSM, the upcoming instant payment system. In addition, financial institutions should be able to modernize their traditional money transfer and ACH payment systems to strategically respond to new payment trends, such as embedded banking, as well as comply with ISO 20022 regulations. Courtney Trimble, Principal and Global Head of Payments, KPMG, commented that given the complex legacy IT environment of many banks, 2022 is an important year to ensure that banks have clear strategies and plans to comply with ISO 20022.
Japan amends foreign exchange law to close crypto loopholes for sanctions against Russia
Government officials from Japan stated that amendments to their foreign exchange laws will take place to prevent Russia from using crypto assets to circumvent western financial sanctions after Moscow's attack in Ukraine. Chief Cabinet Secretary, Hirokazu Matsuno, emphasized that the government will submit the amendments of the Foreign Exchange and Foreign Trade Act during the current parliamentary session to strengthen protection against potential deliberate disregard of sanctions by Russia via digital assets.
The Japanese government imposed asset-freeze sanctions on more than one hundred Russian officials, oligarchs, banks and other institutions subsequent to the Russia-Ukraine conflict. Reports also indicated that Japan banned Russia from their most chosen high-tech exports and revoked trade operations. Earlier this month, Japanese financial regulators ordered approximately thirty cryptocurrency exchanges in the country not to trade cryptocurrencies with sanctioned targets.
Coinbase potentially acquiring $2.2 billion Brazilian-based company, 2TM
Estadão, a Brazilian news publication, reported that Coinbase, a US-based cryptocurrency exchange platform, could complete a US $2.2 billion acquisition of 2TM, a Brazil-based parent company of Mercado Bitcoin, by April 2022. Mercado Bitcoin, Latin America's largest crypto brokerage firm, was given its “unicorn status” as a billion-dollar company in 2021 by its parent company, 2TM, currently valued at $2.2 billion. 2TM’s acquisition strategy, according to reports, has focused on “lusophone” countries (countries recognizing Portuguese as the official language).
The report states that direct crypto adoption and trading are growing rapidly in Brazil. The trading volume of Mercado Bitcoin, the local cryptocurrency exchange, increased seven times higher since August. Rio de Janeiro, Brazil's second largest city, is reportedly in the process of accepting cryptocurrency for certain taxes scheduled for 2023. A blockchain technology and cryptocurrency provider, triple-A, noted that more than ten million Brazilians own cryptocurrency.
The Bank of England to withdraw legal currency status from paper £20 and £50 notes
In an ongoing effort to switch from paper to polymer banknotes, the Bank of England (BoE) will withdraw the legal currency status of paper £20 and £50 banknotes, effective 30 September 2022. It is encouraging the citizens to use or deposit them at the bank or post office . The BoE’s polymer series began with the polymer £20 note (first issued on 20 February 2020) and the polymer £50 note (first issued on 23 June 2021).
The press release stated that there are about £7 billion worth of paper £20 notes and £10.5 billion worth of paper £50 notes in circulation. The notes that are returned to BoE will be replaced with new polymer £20 and £50 for artist J.M.W. Turner and scientist Alan Turing, respectively. After the effective date, only these new polymer banknotes will have legal currency status. Citizens will no longer be able to spend BoE banknotes in stores or to pay for goods and services. UK bank account holders should be able to deposit the withdrawn banknotes into their account. Some post offices may accept seized banknotes as payments for goods or services, or as deposits in accounts accessed through them.
Sarah John, Chief Cashier, BoE, commented that the bank has switched banknotes from paper to polymers during the last few years to help combat counterfeit, while also providing more durable notes. The introduction of polymer banknotes should enable a new generation of security features, making counterfeiting more difficult. Additionally, the notes should be resistant to dirt and moisture, providing better longevity. The notes also have tactile properties that can be used by the visually impaired.
India to impose a 30% tax on profits from cryptocurrencies and digital assets, effective April 1st
India's cryptocurrency investors must pay taxes per the new regulations of Virtual Digital Assets beginning on April 1. Transactions of cryptocurrencies such as Bitcoin, NFTs and other digital assets will have a tax rate of 30% on all gains, but under certain conditions, a Tax Deducted at Source (TDS) of 1% and gift tax (to be paid by the receiver of the digital assets as a gift) may apply, according to the Finance Ministry’s Union Budget 2022. The final date for filing income tax returns (ITR) for the 2020/21 fiscal year is March 31.
In the meantime, reports show that some investors are now transferring crypto assets to private wallets outside India to circumvent the new tax law. If citizens do not submit the ITR by the deadline, they may be fined and required to pay interest from the Income Tax Office.
RBI reveals geo-tagging of payment system expanding digital transactions
A framework for geo-tagging payment system touchpoints has been released by the Reserve Bank of India (RBI) in efforts to deepen digital payments and provide comprehensive access to all citizens of the country. According to the press release, geo-tagging payment system touchpoints enables clients to better monitor the availability of payment acceptance infrastructure such as point-of-sale (POS) terminals and Quick Response (QR) codes. Mapping the exact location of existing payment system touchpoints/acceptance infrastructure is critical to expanding and refining intervention strategies, commented RBI.
Geo-tagging, as stated in the report, is intended to capture the geographic coordinates (latitude and longitude) of payment touchpoints that merchants use to receive payments from their customers. As part of the framework, bank / non-bank payment system operators (PSOs) collect and maintain geographic coordinates for all payment touchpoints. In addition, geo-tags associated with POS terminals and paper-based / soft QR codes must be submitted to RBI.
RBI plans to instruct all banks and non-banks to register the exact location of all payment touchpoints nationwide and report accurate details to RBI via the Centralised Information Management System (CIMS). In addition, the RBI requested PSOs to take the necessary steps to collect the required information in a timely manner and report it to RBI according to the specified deadline. Banking and non-banking PSOs are required to provide nodal officer contact details for geo-tags by March 31, 2022. RBI is expected to provide nodal officers of banking / non-banking PSOs with credentials for submitting their information over CIMS.
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