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UN drugs and crime wing advises Kenya to use blockchain against corruption

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Blockchain technology can help countries like Kenya from losing billions of dollars to corruption, according to an official at the United Nations’ drugs and crime agency.

David Robinson, the regional anti-corruption advisor at the UN’s Office on Drugs and Crime, believes that new technologies like blockchain will help Kenya combat government corruption and other economic crimes.

According to Nation Media Group on Nov. 3, Robinson claimed that blockchain-based solutions can provide full traceability of transactions, protecting public registries from fraud and forgery. The official said:

“Blockchain technology becomes attractive to the global community and international organizations because it is a tool that can be used to potentially prevent corruption and protect public registries from fraud and tampering.”

Robinson said that technologies like blockchain are an important tool for increasing trust, as corruption represents a breach of the public trust. “Online trust became a key asset for transactions between strangers and building confidence in government,” he stated.

Kenya is reportedly losing up to a third of its budget to corruption each year due to a lack of modern equipment and technology for fighting graft. Failures to track corruption cases reportedly cause the country to lose as much as $6 billion each year.

A number of countries around the world have been looking at both blockchain technology and crypto as potential tools to combat corruption. In September 2020, Denmark’s Ministry of Foreign Affairs released a report analyzing the use of blockchain in the fight against corruption. In July, the chairman of Kazakhstan’s anti-corruption service called on the state to develop a national digital currency to fight corruption in the country.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.