Author: Reuters

SEBI open to oversight of crypto trade, in contrast to RBI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Market watchdog has recommended that several regulators oversee trade in cryptocurrencies, documents show, the strongest signal to date that at least some authorities in the country are open to allowing the use of private virtual assets.

The position of the Securities and Exchange Board of India (SEBI) contrasts with that of the Reserve Bank of India (RBI), which maintains that private digital currencies represent a macroeconomic risk, separate documents show.

Both sets of documents, which have been seen by Reuters, have been submitted to a government panel which is tasked with formulating policy for the finance ministry to consider. SEBI’s stance has not previously been reported.

India has taken a tough stance against cryptocurrencies since 2018, when the central bank prohibited lenders and other financial intermediaries from dealing with crypto users or exchanges though the move was later struck down by the Supreme Court.

In 2021, the government prepared a bill that would have banned private cryptocurrencies though it has not been introduced. Last year, when it was president of the G20, India called for a global framework to regulate such assets.

The RBI remains in favour of a ban on stablecoins, according to a person with direct knowledge of the panel’s discussions. The person, who was not authorised to speak to media and declined to be identified, added that the panel plans to firm up its report as early as June.

Stablecoins are cryptocurrencies designed to maintain a constant exchange rate with fiat currencies so that they are less vulnerable to wild volatility.

In its submissions to the government panel, however, SEBI recommended different regulators should oversee activities linked to cryptocurrencies that fall under their domain and that a single unified regulator for digital assets should be avoided.

SEBI said it could monitor cryptocurrencies that take the form of securities as well as new offerings called Initial Coin Offerings (ICO). It could also issue licenses for equity market-related products, said the person aware of the panel’s discussions.

This would be similar to the US, where tokens that are in the nature of securities and crypto exchanges fall under the purview of the Securities and Exchange Commission.

Crypto assets that are backed by fiat currencies could be regulated by the Reserve Bank of India, it said.

The Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA) should regulate insurance and pension-related virtual assets, the documents showed.

It also recommended that grievances of investors trading in cryptocurrencies should be resolved under India’s Consumer Protection Act.

SEBI and the RBI did not respond to requests for comment. The finance ministry, IRDAI and PFRDA also did not respond to requests for comment.

FISCAL POLICY RISKS

In its submissions, the RBI said cryptocurrencies could lead to tax evasion and that decentralised peer to peer (P2P) activities in cryptocurrencies would rely on voluntary compliance – both representing risks to fiscal stability.

It also said cryptocurrencies may lead to loss of ”seigniorage” income, which is the profit earned by a central bank from money creation.

After the RBI’s 2018 orders were challenged by the industry and struck down by the Supreme Court, the central bank asked financial institutions to strictly comply with tough money laundering and foreign exchange rules, effectively keeping cryptocurrencies out of India’s formal financial system.

Even so, trade flourished and in 2022 the government introduced a tax on crypto transactions in India to discourage such trading. It followed that up by asking all exchanges to register locally before facilitating crypto transactions from within the country.

According to a PwC report in December, 31 countries have regulations in place that allow for trade in cryptocurrencies.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RBI cautions non-bank lenders against growing reliance on algo credit models

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Reserve Bank of India (RBI) has cautioned non-bank finance companies (NBFCs) against becoming over-reliant on algorithm-based credit models, while also urging them to avoid overlending in certain segments.

Rule-based models can lead to inaccuracies in credit assessment, Deputy Governor Swaminathan J said in a speech released on the Reserve Bank of India’s website on Wednesday.

While many NBFCs are turning to such models to accelerate growth, they ”should not allow themselves to be blinded by these models”, said Swaminathan.

An over-reliance on past data, on which these credit models are built, can lead to mistakes in evolving market conditions, he said.

The deputy governor, speaking to a gathering of senior officials from among non-bank lenders, said they should avoid setting high-risk limits for certain segments like unsecured loans.

”There appears to be a fancy among most NBFCs to do more of the same thing, such as retail unsecured lending, top-up loans or capital market funding,” Swaminathan said.

”Over-reliance on such products may bring grief at some point in time later.”

NBFCs were also asked to diversify their sources of funding to counter any emerging liquidity risks.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zoho plans $700 million foray into chipmaking

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Homegrown software giant Zoho is embarking on an ambitious venture into chip manufacturing. With a proposed investment of $700 million, the company is actively seeking support and incentives from the government to bring this vision to life.

Founded in 1996 and based in Tamil Nadu, Zoho has carved a niche by offering a suite of software solutions and services to businesses across 150 countries, positioning itself as a competitor to international giants like Microsoft and Salesforce. This venture into chipmaking marks a significant pivot in Zoho’s business strategy, underlining its commitment to fostering technological innovation within India.

At the heart of Zoho’s proposal is the production of compound semiconductors. Unlike conventional silicon-based chips, these semiconductors are tailored for specialised commercial applications, promising to elevate India’s standing in the high-tech manufacturing sector. The initiative aligns with the nation’s strategic business objectives, complementing the government’s robust $10 billion incentive package designed to catapult India into the league of semiconductor powerhouses like Taiwan.

Also read: First Made-in-Assam semiconductors to roll out in a year, defence policy next: CM Himanta Biswa Sarma

The Ministry of Electronics and Information Technology (MeitY), which oversees the country’s chip manufacturing ambitions, is currently scrutinising Zoho’s proposal. Sources reveal that MeitY seeks additional details regarding potential clientele and the broader impact of Zoho’s entry into this sector.

While Zoho has maintained silence on its ambitious plans, insiders confirmed to Reuters that the company has not only earmarked substantial investment for this venture but has also roped in a technological partner to kickstart operations from the ground up.

Earlier this year, Zoho’s founder and CEO, Sridhar Vembu, hinted at a chip design project in Tamil Nadu, though details were sparse. This strategic move into chip manufacturing is a first for Zoho and underscores a broader trend of Indian firms venturing into semiconductor production.

Zoho’s financial success, with annual revenues surpassing $1 billion in the fiscal year ending March 2023, sets a solid foundation for its foray into the semiconductor industry. This development comes on the heels of India’s approval for three semiconductor plants, involving over $15 billion in investments from conglomerates like Tata Group and CG Power. These facilities are poised to serve critical sectors such as defence, automobiles, and telecommunications, underscoring the strategic importance of semiconductors in India’s technological and economic landscape.

— With inputs from Reuters

Also read: India’s chip strategy moves forward with $21 billion proposals for semiconductor

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UK tightens scrutiny of all Indian spice imports amid contamination allegations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Britain’s food watchdog has applied extra control measures on all spice imports from India, it said, becoming the first to ramp up scrutiny of all Indian spices after contamination allegations against two brands sparked concerns among global food regulators.

In April, Hong Kong suspended sales of three spice blends produced by MDH and one by Everest, saying they contained high levels of a cancer-causing pesticide ethylene oxide.

Singapore also ordered a recall of the Everest mix, and New Zealand, the United States, India and Australia have since said they are looking into issues related to the two brands.

MDH and Everest – two of India’s most popular brands – have said their products are safe for consumption.

In the most stringent crackdown so far impacting all Indian spices, the UK’s Food Standards Agency (FSA) said that in light of the concerns it has “applied extra control measures for pesticide residues in spices from India which includes ethylene oxide”.

The agency did not elaborate on the exact steps it is taking.

“The use of ethylene oxide is not allowed here and maximum residue levels are in place for herbs and spices,” James Cooper, Deputy Director of Food Policy at the FSA, said in a statement to Reuters.

India’s Spices Board, which regulates exports, did not immediately respond to a request for comment. India is the biggest exporter, consumer and producer of spices in the world.

In 2022 Britain imported $128 million worth of spices, with India accounting for almost $23 million, data from the Observatory of Economic Complexity website shows.

MDH and Everest export their products to many regions including the U.S., Europe, South East Asia, Middle East and Australia.

Indian regulators have also conducted testing of all spice products and inspected samples of MDH and Everest products, though no results have been made public so far.

MDH has since 2021 seen an average 14.5% of its US shipments rejected over the presence of bacteria salmonella, a Reuters analysis of US FDA data has found.

On Wednesday, the Canadian Food Inspection Agency told Reuters in a statement it was aware of the concerns around MDH and Everest’s products and “continues to monitor the situation”.

“Based on current information, we have no evidence to suggest that the issues raised affect products currently in the Canadian market,” it said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IBM to add 800 AI-related jobs in Ireland

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

IBM plans to hire up to 800 more people in Ireland to help build advanced software underpinned by AI technology, the biggest job announcement in the country’s multinational sector this year, state investment agency IDA Ireland said on Thursday.

The US IT software and consultancy services provider, which is one of the largest multinational employers in Ireland with 3,000 staff, will add the roles in research and development, digital sales and consulting.

Ireland is hugely reliant on foreign multinationals, which have almost doubled their workforce in the last decade to make up around 11% of the entire labour market.

However, multinational employment fell by 0.3% last year, the first annual decline since 2009 as layoffs in the technology sector offset jobs growth in every other category.

“This is set to deliver real uplift in the Irish technology ecosystem by advancing capabilities across key growth areas for IDA Ireland such as cloud, AI, quantum and cybersecurity,” IDA Ireland chief executive Michael Lohan said in a statement.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Microsoft asks hundreds of China staff to relocate, WSJ reports

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Microsoft is asking about 700 to 800 people in its China-based cloud-computing and artificial-intelligence operations to consider transferring outside the country, the Wall Street Journal reported on Thursday.

The employees, mostly engineers with Chinese nationality, were earlier in the week offered an option to transfer to countries including the U.S., Ireland, Australia and New Zealand, the report said, citing people familiar with the matter.

The move comes amid spiralling US-China relations as the Biden administration cracks down on various sectors of Chinese imports, including electric vehicle (EV) batteries, computer chips and medical products.

A Microsoft spokesperson told the Journal that providing internal opportunities is part of its global business and confirmed the company had shared an optional internal transfer opportunity with a subset of employees.

Also Read: India blocks over 1,000 Skype IDs used for online blackmailing

Reuters reported earlier this month that the U.S. Commerce Department is considering a new regulatory push to restrict the export of proprietary or closed source AI models, whose software and the data it is trained on are kept under wraps.

The spokesperson, however, told the newspaper that the company remains committed to the region and will continue to operate in China.

Microsoft didn’t immediately respond to a Reuters request for comment.

Also Read: Microsoft CEO urges focus on cybersecurity amid rising hacking concerns — Read full memo here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Elon Musk’s Neuralink has faced issues with its tiny wires for years, sources say

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Neuralink’s disclosure last week that tiny wires inside the brain of its first patient had pulled out of position is an issue the Elon Musk company has known about for years, according to five people familiar with the matter.

The company knew from animal testing it had conducted ahead of its US approval last year that the wires might retract, removing with them the sensitive electrodes that decode brain signals, three of the sources said. Neuralink deemed the risk low enough for a redesign not to be merited, the sources added.

Neuralink is testing its implant to give paralysed patients the ability to use digital devices by thinking alone, a prospect that could help people with spinal cord injuries.

The company said last week that the implant’s tiny wires, which are thinner than a human hair, retracted from a patient’s brain in its first human trial, resulting in fewer electrodes that could measure brain signals.

The signals get translated into actions, such as moving a mouse cursor on a computer screen. The company said it managed to restore the implant’s ability to monitor its patient’s brain signals by making changes that included modifying its algorithm to be more sensitive.

The sources declined to be identified, citing confidentiality agreements they had signed with the company. Neuralink and its executives did not respond to calls and emails seeking comment.

The US Food and Drug Administration was aware of the potential issue with the wires because the company shared the animal testing results as part of its application to begin human trials, one of the people said.

The FDA declined to comment on whether it was aware of the issue or its possible significance. The agency told Reuters it would continue to monitor the safety of patients enrolled in Neuralink’s study.

Were Neuralink to continue the trials without a redesign, it could face challenges should more wires pull out and its tweak to the algorithm proves insufficient, one of the sources said.

But redesigning the threads comes with its own risks. Anchoring them in the brain, for example, could result in brain tissue damage if the threads dislodge or if the company needs to remove the device, two of the sources said.

The company has sought to design the threads in a way that makes their removal seamless, so that the implant can be updated over time as the technology improves, current and former employees say.

In January, Neuralink implanted the device in the brain of its first patient, Noland Arbaugh, who is paralyzed from the shoulders down due to a 2016 diving accident.

In the weeks after the surgery, “a number of threads retracted from the brain,” Neuralink said in a blog update last week. The post made no mention of adverse health effects to Arbaugh and did not disclose how many of the device’s 64 threads pulled out or stopped collecting brain data.

So far, the device has allowed Arbaugh to play video games, browse the internet and move a computer cursor on his laptop by thinking alone, according to company blog posts and videos. Neuralink says that soon after the surgery, Arbaugh surpassed the world record for the speed at which he can control a cursor with thoughts alone.

It is common for medical device companies to troubleshoot different designs during animal trials and for issues to arise during animal and clinical testing, according to outside researchers and sources who have worked at Neuralink and other medical device companies.

Specialists who have studied brain implants say the issue of threads moving can be hard to solve, partly due to the mechanics of how the brain moves inside the skull.

Robert Gaunt, a neural engineer at the University of Pittsburgh, described the movement of the wires so soon after the surgery as disappointing but said that is not unforeseen. “In the immediate days, weeks, months after an implant like this, it’s probably the most vulnerable time,” he said.

PIG HEAVING

In 2022, the FDA initially rejected Neuralink’s application to begin human trials, and raised safety concerns about the threads, Reuters exclusively reported last year.

Neuralink conducted additional animal testing to address those concerns, and the FDA last year granted the company approval to begin human testing.

The company found that a subset of pigs implanted with its device developed a type of inflammation in the brain called granulomas, raising concerns among Neuralink’s researchers that the threads could be the cause, according to three sources familiar with the matter and records seen by Reuters.

Granulomas are an inflammatory tissue response that can form around a foreign object or an infection.

In at least one case, a pig developed a severe case of the condition. Company records reviewed by Reuters show that the pig developed a fever and was heaving after surgery. Neuralink’s researchers did not recognize the extent of the problem until examining the pig’s brain post-mortem.

Inside Neuralink, researchers debated how to rectify the issue and commenced a months-long investigation, said the sources familiar with the events.

Ultimately, the company could not determine the cause of the granulomas, but concluded that the device and the attached threads were not to blame, one of the sources said.

Also Read: Elon Musk’s xAI nears $10 billion deal to rent Oracle’s AI servers: Report

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Frank McCourt’s Project Liberty forms consortium to bid for TikTok’s US operations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Entrepreneur and former Los Angeles Dodgers owner Frank McCourt said on Wednesday his non-profit Project Liberty is forming a consortium to buy social media platform TikTok in the United States.

A law signed by President Joe Biden on April 24 gives the social media platform’s owner, ByteDance, until January 19 next year to sell TikTok or face a ban.

The bill was passed by US lawmakers on account of worries that China could access Americans’ data or surveil them through the app.

The White House had said it wants to see Chinese-based ownership ended on national security grounds but not a ban on TikTok.

Project Liberty, working with Guggenheim Securities, law firm Kirkland & Ellis, technologies, academics and others, proposed to migrate the platform to a digital open-source protocol.

Project Liberty had launched the open-source Decentralised Social Networking Protocol in 2021, establishing a shared social graph that is not dependent on a specific application or a centralised platform.

Also Read: TikTok content creators sue the US government over law that could ban the popular platform

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s April merchandise trade deficit widens on lower exports

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

India’s merchandise trade deficit in April was wider than expected, hurt by lower exports and a surge in gold imports, government data showed on Wednesday.

India’s April merchandise trade deficit stood at $19.1 billion, according to a Reuters calculation, higher than economists’ expectation of $17.23 billion, according to a Reuters poll. In March it was $15.6 billion.

India’s merchandise exports in April stood at $34.99 billion, while imports were $54.09 billion, government data showed. In March, merchandise exports were $41.68 billion, while imports stood at $57.28 billion.

In April gold imports more than doubled to $3.11 billion, compared with $1.53 billion in March. The country, which is the world’s third consumer of oil, imported $16.46 billion worth of oil in April compared with $17.23 billion, the government said.

“Gold imports are well within the average trend. It is not an exception,” Trade Secretary Sunil Barthwal said.

“Most of the central banks are buying gold because of conflicts. Gold prices have increased and in terms of value imports are appearing to be high.”

The share of gold in India’s foreign reserves rose to 8.15% at end-March from 7.37% at the end of September.

Services exports in April were $29.57 billion, while imports of $16.97 billion compared with $28.54 billion and $15.84 billion respectively in March.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Elon Musk’s xAI nears $10 billion deal to rent Oracle’s AI servers: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk’s artificial intelligence startup xAI has been talking to Oracle executives about spending $10 billion to rent cloud servers from the company over a period of years, The Information reported on Tuesday, citing a person involved in the talks.

The deal would make xAI one of Oracle’s largest customers, the report said, as Musk looks to raise funds for xAI in an attempt to rival the AI offerings of OpenAI and Google.

The cloud negotiations are ongoing and there is no guarantee that the two companies will sign a deal, the report added.

xAI was reportedly in talks to raise $3 billion in a round last month, which would have valued the company at $18 billion.

Oracle and Elon Musk did not immediately respond to Reuters requests for comment.

Oracle’s co-founder Larry Ellison, a self-described close friend of Elon Musk, announced in September that Musk’s startup had signed a contract to train AI models in Oracle’s Gen2 Cloud.

Oracle released an update to its database technology earlier this month intended to make it more useful with AI.

XAI is the largest H100 customer at Oracle, using more than 15,000 of the AI chips, the report said. H100 is an AI chip made by Nvidia.

Last month, Musk said xAI would launch an enhanced version of its chatbot Grok to early testers and existing users on his social media platform X.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow