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Umbrella Network kicks off Ethereum with a cross bridge to BSC

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On Friday, Oracle Umbrella Network's decentralised service was released on Ethereum.

Oracle Umbrella Network's decentralized service officially launched on Ethereum on Friday and initiated transactions between the chain between the dominant smart contract platform and the Binance Smart Chain or BSC. The cross-chain bridge connecting Ethereum and BSC was developed internally on the umbrella network, emphasizing the need to transfer tokens and other crypto assets between the two networks. Cross-chain bridges also allow users to organize and process crypto tokens on any blockchain. Umbrella has announced plans for future cross-chain integrations with Polygon, Solana, Cardano, and Avalanche, although no timetable has been set.

Although the blockchain industry spawned several Oracle services, Umbrella claims that its protocol offers fast and affordable pricing compared to leading competitors. Initially, the protocol will have more than 1,200 data pairs on Ethereum, allowing users to integrate data from spot cryptocurrencies, crypto derivatives, and traditional financial markets. Oracles are an important part of smart contracts because they provide a reliable source of data from external sources and thus expand the scope of their operations. The need for reliable data channels seems to be increasing as smart contract technology grows in popularity. Example: Brazil's major exchange is investigating ways to provide the country's central bank with data on digital currency projects.

Decentralized financing protocol or DeFi tries to integrate oracle data. Chainlink, the dominant oracle provider, has shown a strong presence in this niche, especially after its successful implementation of its Ethereum Layer-2 arbitrary scaling solution in August. The Brazilian Stock Exchange (B3), one of the few global exchanges that trades Bitcoin (BTC) Exchange Traded Funds, is exploring ways to provide data about the country's central bank, or CBDC, digital currency.

Luis Kondic, managing director of publicly traded products and data at B3, said the exchange was considering providing forecasts to connect external data to Brazil's CBDC, a digital reality. The executive presented his comments at an online event related to the CBDC hosted by Brazil's central bank on Thursday, reported. “We are looking at this and evaluating the best way to interact and participate in this ecosystem. However, I believe that we need to develop and promote this to meet the future requirements of this programmable cash payment system,” said Kondic.

Oracles are an important part of smart contracts because they provide data from external sources to make smart contacts under certain conditions. According to Kondic, smart contracts have the potential to bring several benefits to Brazilian CBDCs, including the use of automated profit distribution based on the B3 oracle. “There are many uses such as the distribution of funds among shareholders which is scheduled automatically based on the company's profits; Plan money for automatic settlement of issuance and payment of receivables or automatic payments to suppliers in the distribution chain,” explained the managing director.

Other banks, such as the Reserve Bank of New Zealand, have also outlined the potential uses of CBDC smart contracts, including automated execution of rent or bill payments. The news comes against the backdrop of Brazil's central bank making progress in developing CBDCs after establishing a special group in October 2020 to study the crypto industry. On September 9, Brazil's Central Bank released a presentation saying the government was investigating potential smart contracts and decentralized finance applications as part of its CBDC investigation. Regulators are expected to launch the first digital real pilot in 2023, after providing a proof of concept in 2022. The UK central bank stepped up its research on central bank digital currencies (CBDC) by selecting a long list of banking and fintech experts to assist it.

The Bank of England on Thursday announced its membership in the CBDC technology and engagement forum, which includes some of the biggest names in technology and finance, including Google, Mastercard, Consensys - and even Spotify. This week's announcement is a signal that the central bank is taking its CBDC plans seriously. It states that the technology forum will source from leading experts in digital payments and cryptocurrencies. "The forum will help banks understand the technological challenges in the design, implementation and operation of CBDCs."

The Engagement Forum includes "high-level stakeholders from industry, civil society and academia" who will help the World Bank and Ministry of Finance "understand the practical challenges of designing, implementing and operating a CBDC". Tech experts include Edwin Aoki, PayPal's chief technology officer for blockchain and cryptocurrency. Will Drewry, Google's chief software engineer, joined him, as did CBDC and payments manager Mathieu Saint-Olive of Ethereum software solutions company ConsenSys. The technology forum also includes payments executives and experts from Amazon Web Services, MasterCard, Visa, Stripe, IMB, R3 and music streaming platform Spotify.

The engagement forum consisted of bank managers and business experts, including George Elhederi, Co-Executive Director of HSBC Global Banking and Markets, Arun Collie, Morgan Stanley Chief Operating Officer, and Stephen Gilderdale, Chief Product Officer of SWIFT interbank communications standards. The Bank of England launched its initial CBDC survey in November 2020. In April, the central bank published a list of job openings related to CBDC research and development. However, the Bank of England remains sceptical about cryptocurrencies. Their governor Andrew Bailey warned about the risks of trading cryptocurrencies in May, telling investors “Only buy it if you are willing to lose all your money". 

UK Treasury Secretary Rishi Sunak has added cryptocurrencies and stablecoins to the list of financial reforms the government plans to undertake over the next few years. Speaking to lawmakers at the Mayor's London residence on Thursday, the Chancellor said the UK government would implement recommendations to help make the country a hub for fintech innovation and business. While Sunak said the UK would protect its citizens' access to money, he added that authorities would monitor financial and technology updates and work on reforming their own digital assets. Based on an independent review of the UK's fintech sector by entrepreneur Ron Khalifa, Sunak said officials suggested breakthrough reforms "to support the safe acceptance of cryptocurrencies and stable coins" and investigated issues of cryptocurrency or CBDC currency issuance. The report, released in February, proposes changes to the country's regulatory framework for new technologies, encourages fintech education, promotes UK existing fintech companies and more.

The UK has been investigating CBDCs for some time. The country took a big step last year when the Bank of England and the Treasury announced they were investigating "whether and how central banks can issue their own digital currency in addition to cash". Following the publication of the Kalifa review in February, authorities continued to establish a central bank digital currency working group to investigate initial issues related to the design, implementation and operation of CBDCs in the UK. While Sunak said in November that Brexit would offer the UK a chance to reshape its financial services sector, some raised concerns about the impact of CBDC implementation on the market. The regulatory impact of stable coins, concerns over currency sovereignty and consumer protection, and access to cash for individuals are under control as the UK investigates the digital currency transition further. "Although I believe in the power of new technology, we must also manage its influence on our economy and society," said the Chancellor. 

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