Wednesday, July 31 — crypto markets are seeing widespread green, with Bitcoin (BTC) breaking back above $9,700 and many large market cap altcoins seeing solid gains of between 3 and 9% on the day.
Despite trading in a lower price range since dropping back to a four-figure price point in a recent corrections, BTC is today up a solid 2.4%, bringing it to $9,717 by press time.
This mild uptick nonetheless stops short of bringing the coin back into the green on its 7-day chart, where Bitcoin is still reporting a fractional 0.7% loss. On the month, losses are starker, topping 8%.
Yesterday, Peter Tchir — a former Executive Director at German multinational investment bank Deutsche Bank — argued that Bitcoin is an indicator of hidden geopolitical tensions, pointing to the coin’s momentous performance this May at a time of fraught trade talks between the United States and China.
Also this week, erstwhile Bitcoin bear and CNBC host Joe Kernen predicted that the top coin could hit $55,000 — a 500%+ price surge — by the time of its next halving in May 2020.
Top altcoin Ether (ETH) — which celebrated its fourth birthday yesterday — has posted a 1.9% to trade around $212 by press time. In corrections earlier this week, the coin had circled perilously close to the round $200 mark, but has since recovered ground and is just slightly in the red, at 2.2%, on its 7-day chart. On the month, however, Ether is down over 18%.
XRP is reporting a 2.7% gain on the day, while among the remaining top ten coins several alts are seeing stronger upward momentum: Bitcoin Cash (BCH) is posting a 7.5% gain on the day, Litecoin (LTC) is up 3.6% and Binance Coin (BNB) is up 4.1%.
In the context of top twenty coins, Tezos (XTZ) is outstripping all other assets, seeing a 24% gain on the day following news of the token’s listing on major United States crypto exchange Coinbase. At press time, XTZ is trading at $1.24
Still among the top twenty, strong gains are being reported by Chainlink (LINK) — up over 9% — as well as by NEO (NEO), IOTA (MIOTA) and Cosmos (ATOM), all of which are up by 4-5%.
Total market capitalization for all cryptocurrencies is at $261,434,827,781 at press time, according to Coin360 data.
Dominating the crypto headlines this week is the hearing devoted to examining regulatory frameworks for cryptocurrencies and blockchain held at the United States Senate Banking Committee. Cointelegraph reported live on the most important developments during the hearing as it unfolded.
Yesterday’s Committee hearing notably follows upon earlier hearings in mid-July that had examined the regulatory hurdles surrounding Facebook’s Libra.
Despite the lack of decisiveness in the bitcoin market following the dominant crypto asset’s abrupt drop from $14,000 to $9,500, many analysts – even bearish ones – generally remain confident that the bitcoin price is heading towards a new record high in 2020.
On CNBC’s Squawk Box, as CCN reported, prominent news anchor Joe Kernen emphasized the imminence of the next halving of the Bitcoin blockchain protocol, suggesting that it could act as a major catalyst for the asset over the medium to long term.
Bitcoin price should surge as one crucial event disrupts supply & demand ratio
In recent years, the bitcoin price has been primarily driven by supply and demand from the market. As the market capitalization of the asset grew, the impact of news and events have started to lessen.
The block reward halving of bitcoin, which occurs approximately every four years, is expected to have a fundamental effect on the circulating supply of bitcoin, altering the rate at which new BTC are mined.
On the Bitcoin blockchain protocol, users mine BTC to secure transactions and process payments using mining equipment and electricity. In return for the consumption of resources, miners are rewarded with BTC, which then is sold, primarily through over-the-counter (OTC) markets.
During or around May 2020, the amount of BTC miners receive for processing transactions on the Bitcoin blockchain protocol will decline by half, leading to a decline in the inflow of BTC into the global market from miners.
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“With what we produce of gold every year, it would take 62 years to produce that much gold. If you do the same kind of analysis using bitcoin or silver or anything, you can come up with some of these flow metrics that are highly correlated. Silver I think is 22 years and gold is… and in the next halving, bitcoin, all of the sudden, gets close up to where gold is…. we will see anyway.”
Due to the block reward halving and other technical indicators, technical analysts who remain bearish on the short-term trend of bitcoin have stated that in the long-term, the trajectory of the dominant cryptocurrency is likely to be positive.
Coinbase Custody announced the addition of the recently Reg A+ certified Props token to its custodial listings.
The institutionally-weighted, and independently-funded custodial wing of Coinbase will provide cold storage as well as a wallet for holders of Props. The tokens were designed by YouNow developers as a way to reward users of the platform and its content creators.
Furthermore, the Coinbase wallet will act as the default wallet offered by YouNow to users.
“This wallet has a tighter integration with the YouNow app, which makes for a smooth UX when using Props,” according to a company statement. YouNow has a 47 million user base.
Currently available on YouNow, with three additional applications announced, Props’ unique Reg A+ investment structure, and regulatory status, acts as an incentive for users to build upon and disseminate the platforms on which the tokens operate by giving holders a vested interest in the platforms’ success.
Indeed, Yonatan Sela, Co-founder of Props, told CoinDesk that since launching earlier this month, more than 230,000 individuals have acquired Props through engaging with either YouNow.
Additionally, while he couldn’t disclose hard figures, Sela said YouNow has seen “content creation increase by double digit figures [since the introduction of the Props rewards incentive], which is huge for a platform all about content creation.”
As part of the regulatory arrangement, which took approximately a year to sort out, Props are fully transferable between participating wallets and platforms, but cannot be exchanged for fiat currency. In this sense, Props function as a utility token, bound to its specific purpose.
However, through the Coinbase Custody listing, the institutional investors and major content creators that hold Props will be able to shield their funds with an industry-recognized custodian. All digital assets with Coinbase Custody are segregated and covered by the company’s insurance policies. Sam McIngvale, CEO of Coinbase Custody, said in a statement:
“No other platform can offer the safety and protection of our technology and comprehensive insurance. But more than that, for projects like Props where network participation and validators are critical to the chain’s operation, Coinbase Custody offers the only option that allows for both the secure cold storage of assets and the ability to interact with the network.”
Sela noted in 2017, Props pre-sold $21.5 million tokens to such investors, who “have received the tokens, and have meaningfully exposure.” He said these holders include Union Square Ventures, Comcast, and Coinfund.
Though the token has attracted a number of institutional investors, Sela also stressed the amount of holders who first came to cryptocurrencies through being rewarded with Props.
“It’s an experiment to see what happens when putting a crypto token in hands of real world people that are attracted by its utility.”
American tech giant Seagate has entered the pilot stage of its blockchain project designed to fight counterfeit hard disk drives (HDD), Forbes reported on July 30.
This pilot is a part of the joint initiative Seagate and IBM launched last November. The project aims to help manufacturers, integrators and business partners to better authenticate the provenance of HDDs by using IBM’s Blockchain Platform.
According to Seagate’s data security research group managing technologist Manuel Offenberg, in the pilot IBM “is both the customer of these drives, as well as the technology provider for the underlying Hyperledger Fabric platform”.
Seagate’s blockchain is designed to improve the supply chain of hard drives and track products to the customers and back to the company in the event of a return.
Personal data protection
With this move, Seagate also intends to ensure that HDDs returned due to defects contain no customer personal data. Mentioning a so-called “certified erase” as a solution, Offenberg said that the company wants “to make sure that these devices have no PII [personally identifiable information] data on them,” adding:
“When a drive fills in a customer’s system and the drive comes back as part of its returns process, if we can prove that the drive was cryptographically erased, and therefore, the information is no longer on the device, then, from a risk perspective, this reverse supply chain can treat that device differently.”
Speaking further about the preliminary work with IBM, Offenberg said that the company is “involving the cryptographic identity of the device in the blockchain transaction, such that the digital trust of the product itself is part of the transaction.” According to Offenberg, Seagate is also planning to extend its partner network in the reverse supply chain.
As a recent study by the market research and consulting firm Allied Market Research shows, the global blockchain supply chain market is expected to reach over $9 billion by 2025. Among the key driving factors the study named the sector’s demand for transparency and improved security of supply chain transactions that blockchain technology could purportedly ensure.
Nasscom, a major Indain trade organization, has said that it is against a blanket ban on cryptocurrencies, which was recently proposed by a governmental panel in the country According to a report by local financial periodical The Economic Times on July 30, Nasscom commented:
“Nasscom believes that the recent proposal of the inter-ministerial committee of the government to ban all cryptocurrencies barring those that are backed by the government, is not the most constructive measure. […] Instead, the government should work towards developing a risk-based framework to regulate and monitor cryptocurrencies and tokens.”
As per the report, Nasscom claims that crypto projects can always be tested in regulatory sandboxes prior to launch. Nasscom also reportedly believes that banning crypto will only serve to push away legitimate businesses who are already pro-compliance.
However, Nasscom does believe there is work to be done in terms of creating a regulatory framework to mitigate illegal activities in the crypto space:
“We should work towards creating a regulatory framework that will constantly monitor and prevent illegal activities. Regulating would allow the law enforcement agencies to be better equipped to understand these new technologies, enable them to gather intelligence on criminal developments and take enforcement actions.”
Nasscom was founded in 1988 and has over 2,700 member companies across the IT, business process outsourcing and other technology-related industries.
India: a hostile regulatory environment
Despite there being no current official ban on cryptocurrencies in India, a number of crypto exchanges have closed as the Reserve Bank of India (RBI) has barred financial institutions in the country from offering services to crypto-related businesses.
The circular prohibiting banks from offering services to crypto-related firms was released by the RBI in April 2018 and subsequently upheld by the country’s Supreme Court that May.
In May 2019, the crypto exchange Coinome halted its services in India due to regulatory pressure. The exchange allegedly wrote in an email to customers:
“India is currently going through uncertainty on crypto guidelines and regulations. The government of India has not yet taken a decision on the regulatory framework for crypto exchanges or wallets. Further, the supreme court is yet to act upon the public interest litigation (PIL) on (the) regulation of crypto assets.”
Coinbase Pro announced the coming addition of the proof-of-stake and democratically-governed Tezos blockchain to its institutional trading platform.
Tezos (XTZ), a multi-million dollar blockchain that officially launched in September 2018, offers the opportunity for its stakeholders to vote on-chain on proposed upgrades. When Tezos was added to another Coinbase affiliate, Coinbase Custody, in March, the move was contested by those who opposed the extension of voting rights to custodial token holders.
It is unclear whether Coinbase Pro will offer “self-amending” duties to users of its platform.
Tezos price last 30 days via Coinbase data
Before trading is activated, Coinbase Pro must build reserves of the coins in trading pairs with BTC and USD. Beginning on Monday, August 5, the firm will accept inbound transfers of XTZ 12 hours in advance of launch, according to a company blog post.
“Once sufficient supply of XTZ is established on the platform, trading on the XTZ/USD, and XTZ/BTC order books will start in phases, beginning with post-only mode and proceeding to full trading should our metrics for a healthy market be met,” the company states.
Similar to onboarding other digital assets to the trading platform, Coinbase expects to move through four stages before tezos functionality is fully operational.
The first is “Transfer-only,” when orderbooks will only support incoming coins. Once a reserve is established, the platform will enter into the minute-long “Post only” phase, where users will be able to post limit orders that will remain unfulfilled. Third is “Limit-only” in which “limit orders will start matching but customers are unable to submit market orders.”
After these embryonic stages, full trading will be enabled. Importantly, Tezos will not be available on Coinbase itself. Tezos held a $232 million initial coin offering (ICO) in 2017, one of the largest funding events at the time.
Last month, Coinbase Pro added trading Chainlink, the company expects to roll out additional digital assets.
The United States Committee on Banking, Housing and Urban Affairs has ended the hearing on “Examining Regulatory Frameworks for Digital Currencies and Blockchain” today, July 30.
Circle CEO Jeremy Allaire, Rebecca M. Nelson, a specialist in international trade and finance; and Mehrsa Baradaran, a professor of law at the University of California Irvine School of Law all testified before the committee.
Lawmakers want the U.S. to lead in blockchain
Senator Michael Crapo of Idaho began the hearing saying that cryptocurrencies and blockchain technology are inevitable and could be beneficial, further noting that the U.S. should establish itself as a global leader in this sector. Crapo concluded:
“I want the U.S. to stay at the forefront of this technology, which both has incredible potential and incredible risk.”
Sen. Catherine Marie Cortez Masto of Nevada said that she believes in the potential of blockchain, and the importance of leading in this technology over China.
Facebook’s Libra concerns many
For many lawmakers, the issue of crypto has now become synonymous with Facebook’s Librastablecoin. Sen. Sherrod Brown of Ohio pointed out that the social media giant has “proved over and over that they can not be trusted.” Brown stipulated that Facebook intends to undermine the U.S. dollar and payment systems, while hiding behind the phrase “innovation.”
Parrying Brown’s statement, Nelson said that Facebook could be a game changer for cryptocurrencies, however it has raised both regulatory and systemic concerns before it can be implemented. Nelson also stated that Facebook has changed the debate about cryptocurrencies.
Sen. Mark Warner of Virginia then asked about the literal meaning of the 1:1 backing of the Libra, wherein Allaire explained that while the first wave of these types of digital currencies were focused on establishing a global digital currency, the critical mainstream use cases for the financial services sector has needed the development of stable coins, with Libra as an example.
Allaire further noted the government’s restrictive stance towards crypto-related companies, which led them to be based overseas rather than in the U.S. Allaire said that it is necessary to regulate digital assets, however, Congress should define digital assets as a new asset class. Allair stated:
“Digital money will move frictionlessly, everywhere in the world, at the speed of the internet, hopefully with a high level of security and data protection.”
Today’s hearing is part of a recent trend of increased regulatory scrutiny toward cryptocurrencies in the U.S., following the hearings on Libra. Industry players thus tend to discuss an array of relevant issues such as identity, privacy, data security, domestic and international approaches to regulation, as well as the potential of blockchain and crypto solutions for finance in the near future.
The Philipines’ UnionBank has issued its own stablecoin, PHX, according to Filipino media outlet PhilStar Global. With the issuance, the bank also conducted the first blockchain-based transaction by a Filipino bank.
The PHX stablecoin is pegged to the Philipino peso and backed by UnionBank reserves.
“PHX is a stable store of value, medium of exchange and is a programmable token with self-executing logic. It enables transparent and automatic execution of payments,” said UnionBank Senior Vice President Arvie de Vera.
UnionBank’s blockchain transaction occurred on its i2i payment system which connects islands, institutions and individuals, per PhilStar. Three rural banks took part in the inaugural transfer.
PHX is available to all UnionBank account holders and purchasable through debits to account holders. In the long run, UnionBank plans on making PHX and i2i interoperable platforms across wallets and platforms in the Philippines and abroad.
The stablecoin and i2i system are hardly baby steps for UnionBank which has maintained a growing interest in digital assets. In February 2019, the bank launched the first two-way virtual currency ATM, largely to address remittance service demand.
Remittance services continue to set the pace for bank development of digital assets. Financial giant J.P. Morgan launched its own payment rail, JPM Coin, on its Quorum blockchain earlier this year. Global settlement network SWIFT has also upped settlement time recently in a bid to counter alternative services like Ripple.
Some 10 million Filipinos live abroad creating a large demand for remittance services. In April, Coins.phinked a deal with Western Union for direct settlement into Coin.ph wallets. Over the last few years, remittance services have grown three percent annually in the island country.
Cryptocurrency giant Ripple has partnered with Kyoto University and the University of Tokyo as part of its University Blockchain Research Initiative (UBRI). Ripple announced its new Japanese partnerships in a press release on July 30.
Emi Yoshikawa, senior director of global operations at Ripple, noted that there is high interest in blockchain within Japanese academia:
“Japan is quickly becoming a leading force in crypto assets and blockchain. The region has always been forward thinking and exploring ways to improve the current financial system […] We have seen high levels of interest from the academic community on topics around blockchain and crypto. Ripple is committed to engaging and inspiring students to become part of the workforce of the future, across areas such as blockchain, distributed computing, banking and fintech.”
The University of Tokyo will reportedly award scholarships to students doing blockchain research, and its economics department is also arranging public seminars on blockchain and settlement.
The university’s economic professors are also engaged in research on the evolving financial system, as well as frameworks for regulation and supervision for crypto assets and blockchain technology.
At Kyoto University, graduate students are conducting blockchain research in areas such as remittances by migrant workers, digital identity management for refugees and supply chain management.
University Blockchain Research Initiative
According to the announcement, Ripple provides financial resources as well as expertise and technical resources to support research. UBRI is currently partnered with 33 universities, as per the press release.
Ripple states that it believes the demand for tech solutions is growing as globalization increases and hopes that by partnering with universities, the company can help usher in a new generation of engineers, business leaders, entrepreneurs and other professionals who are blockchain literate. Eric van Miltenburg, senior vice-president of global operations at Ripple commented:
“As the industry matures, the academic community plays a pivotal role in paving the road for innovative companies and entrepreneurs leveraging blockchain technologies and digital assets.”
As previously reported by Cointelegraph, the Institute for Fintech Research at Beijing’s Tsinghua University partnered with UBRI in January. The university launched the Blockchain Technology Research Scholarship Program, a program designed for researching global blockchain regulations as well as industry development.
Venezuelan President Nicolás Maduro and his administration appear to be leveraging tax revenue and cryptocurrencies as part of a broader effort to evade economic sanctions, an investigation by Spanish newspaper ABC has found.
As detailed in a story published Monday, the newspaper asserts it uncovered a scheme by which Maduro and his associates were using a digital wallet app to turn tax revenue from domestic airports into bitcoin and other cryptocurrencies that were then transferred to exchanges in Hong Kong, Hungary, Russia and China.
There, the funds were converted and sent back to Venezuela, according to the report.
The effort is the latest example of how the ban on Maduro’s government from using US bank accounts and from participating in the open international market has forced it to look at cryptocurrencies as a way to obtain dollars.
The newspaper alleges that the tax revenue in question came from the Maiquetia International Airport (IAIM) located near Caracas, the country’s capital, and that taxes were collected through an automated system that works with an app called Jetman Pay.
Maduro’s administration is said to be in talks to expand its use of the app, including for proceeds it collects from refueling airplane that traffic the airport.
In a contract – allegedly yet to be signed – the Jetman Pay app would be used to directly defy the U.S. ban again. Under the scheme, a plane would land at IAIM, at which point it would transfer fiat currencies in exchange for fuel. Petróleos de Venezuela, S.A, the state’s oil and natural gas company, would then use the app to pay government taxes, upon which it would be sent abroad as cryptocurrency.
The automated system has been used at IAIM since February 2018 for airport tax collection.
The report concluded by speculating that Maduro may be looking to expand the scheme to other airports across the country.
OB1, the developers behind the online decentralized marketplace and currency trading platform OpenBazaar announced a mobile counterpart called Haven.
Haven allows users to buy and sell goods and services directly with each other, using cryptocurrencies, without relying on middlemen who take a cut of merchants’ transactions or gather shoppers’ data.
The app is organized into four sections: shopping, social, chat, and a non-custodial multi-wallet. For all features of the peer-to-peer network, user information is stored locally and protected with end-to-end encryption, meaning only the parties involved in the sale or conversation are able to see the details.
Since OB1 launched its 2.0 of OpenBazaar, 250,000 nodes joined the permissionless network. Jenn Cloud, OB1 communications lead, said “there is a core user base of several thousand who frequently use the software and many more are casual users.” A substantial proportion of the “long-lasting nodes” are merchants.
“We’ve heard many stories from merchants about finding OpenBazaar a refugee from the high fees, restrictive terms and conditions, and poor treatment of merchants on eBay and Amazon.”
The app has many of the same features as OpenBazaar, but does not support P2P cryptocurrency trading. Additionally, dispute moderation is only supported by the desktop client.
The social feature is new and enables users to easily communicate with each other. Importantly, it is “not connected to transactions or any other activities on the network and will never post anything automatically,” said Cloud.
Like OpenBazaar, Haven will support BTC, BCH, ZEC and LTC. The representative said plans for a previously reported native token, OBC, are currently on hold.
Looking forward, however the team plans to add Ethereum support. Also, though “no firm plans have been made by the OB1 team… several in the OpenBazaar community have begun work to see if it’s possible to support Monero,” said Cloud.
Haven is available in the Apple App Store and Google Play. This week, the company is offering special deals, such as fifty percent off select electronics and Haven store gift cards, posted in the app “at undisclosed times.”
OB1 has raised $9.25 million to date from investors including Union Square Ventures, Andreessen Horowitz, OMERS Ventures, BlueYard, Bitmain, Digital Currency Group, and venture capitalist William Mougayar.
While post offices sometimes offer banking services, Croatian Post is looking at launching a nationwide cryptocurrency exchange service.
For a pilot effort, Croatian Post, or Hrvatska Pošta, is now offering crypto-to-fiat exchanges in three post offices in the coastal town of Zadar – a place popular with tourists.
Hrvatska Pošta said Thursday that the trial run will allow it to gauge the market interest for such a service and, if successful, it may roll out crypto exchanges “in all major towns and tourist centers in Croatia.”
According to the announcement:
“Over the past few years, cryptocurrencies have developed more and more users, and Croatia will, with its network of 1,016 post offices, surely contribute to their popularity. Digitalization is one of the Croatian postal development strategies and a driver of numerous business projects. Entering the digital currency market, Croatia Post confirms its position as one of the leaders in digital transformation.”
The pilot – which allows users to convert cryptos into the Croatian national currency, the kuna (HRK) – comes via a collaboration with Croatian crypto brokerage and payments firm Electrocoin, which has been in operation for five years, Hrvatska Pošta said.
Telecommunications giant Huawei’s chief executive has said that the time is ripe for China’s government to preempt Facebook’s Libra.
Speaking in an interview with Italian media outlet L’economia, CEO Ren Zhengfei remarked that China has the capability to pursue such an undertaking. He was asked a question about U.S. global hegemony and Facebook’s issuance of an international currency specifically.
Ren was quoted as saying (according to a translation):
“Even China is able to issue such currencies, why wait for Libra? The strength of a state is greater than that of an Internet company.”
Ren was not necessarily looking to take his company toe-to-toe with the social media giant. Though his firm has made significant inroads in the blockchain space – including joining the Hyperledger consortium and releasing a blockchain-backed cloud service – he instead pointed to the advancements in blockchain technology made by the Chinese nation-state.
In May, the People’s Bank of China hired blockchain experts in a move to widen its distributed network investments, useful for “large scale transactions,” bank representatives said at the time.
Additionally, while some members of China’s central bank have said that Libra’s deployment could negatively impact the country’ economy, Wang Xin, head of the research bureau at the People’s Bank of China, said the competition could propel the country to issue its own national cryptocurrency.
In fact, a few weeks after Libra was announced, searches on the China’s web search giant Weibo skyrocketed. This is in spite of the fact that Facebook has been banned in the country since 2009.
Cryptocurrency mining is now an official industrial activity in Iran after winning approval from the country’s cabinet.
In a session on Sunday, chaired by the country’s president, Hassan Rouhani, cabinet ministers endorsed the activity and said industry participants would need to seek the required licenses from the Ministry of Industry, Mine and Trade, the Mehr News Agency reports.
As CoinDesk reported last week, crypto mining had already being given approval by the Chamber of Commerce, Industries, Mines and Agriculture, a government economic commission.
On Sunday, the cabinet also said cryptocurrency users must accept the risks of the technology and that neither the government nor the banks would provide any guarantee.
Cryptocurrencies are still not allowed in domestic transactions, according to Mehr. Mined cryptos will be taxable under the country’s rules, unless the cryptocurrencies are exported and the revenues brought back to Iran.
The deputy minister energy for electricity and energy Homayun Haeri said recently that the government will also vote on a measure to approve an electricity rate for mining farms. Mehr’s report indicates that decision hasn’t yet been made.
Rival manufacturers of blockchain smartphones, Samsung and Pundi X, appear to see the benefits of working together on crypto adoption.
Announced by Pundi X in a blog post on Monday, the firms have entered a symbiotic relationship regarding their wallet tech, with Pundi X integrating with Samsung’s Blockchain Wallet and making its XWallet available to the Galaxy S10 phone’s blockchain app options.
“This presents a unique opportunity to push blockchain technology and blockchain-based digital assets into the mainstream, reaching the millions of Samsung smartphone users around the world,” firm says in the post.
Pundi X claims the news makes it the first fintech app in the S10’s blockchain ecosystem.
S10 users adding XWallet to the Samsung Blockchain Wallet will be able to move cryptocurrencies between the two apps. Pundi X suggests that users can use Samsung’s wallet to store cryptos securely, “like a savings account,” and moving them to the XWallet “checking account” for use in payments.
Pundi X added that, with XWallet recently becoming available via XPOS – the firm’s blockchain point-of-sale device – more payment options will be on offer for S10 users as a result. XWallet is also connected with XPASS, Pundi X’s NFC-enabled crypto payment card product.
The firm said:
“The XWallet’s integration with the Samsung Blockchain Wallet thus makes Pundi X payment ecosystem available to a much wider audience, allowing the Samsung Galaxy smartphone users to not only store their ETH securely but also transfer to XWallet and spend it in a variety of shops, opening their doors to the new generation and their preferred cryptocurrencies.”
Samsung launched its S10 flagship phone back in March, revealing a bold blockchain play that saw it offer the crypto wallet alongside decentralized apps (dapps), merchant payments and other features such as blockchain signing.
Details of Pundi X’s device were aired at the Mobile World Congress conference in Barcelona in February and a launch is expected later this year. The prototype XPhone is said to be able to make callsover a blockchain.
The U.S. Department of Defense (DoD) is looking to forge a blockchain cybersecurity shield.
In a report published on July 12 titled Digital Modernization Strategy, the DoD outlined several ways to advance the nation’s digital defenses. This includes the integration of cloud and quantum computing, artificial intelligence, and improved communications through distributed ledgers.
In fact, DARPA, the research wing of the Department is already experimenting with the technology “to create a more efficient, robust, and secure platform,” to secure messaging and process transactions, reports Decrypt.
Specifically, blockchain may be deployed between units and headquarters as well as intelligence officers and the Pentagon. As part of the Digital Identity Management program, the agency may also issue a digital token that authenticates an agent’s identity.
The DoD is also experimenting with the technology to facilitate the creation of an unhackable code to secure its databases.
As part of the second Cryptographic Modernization program, in effect since 2000, the Department is replacing old hardware and cryptographic systems to meet the challenges of the improved computing power of the nation’s adversaries.
Citing the trustless, transparent, and immutable attributes of blockchain the Department writes:
“Blockchain networks not only reduce the probability of compromise, but also impose significantly greater costs on an adversary to achieve it.”
The shift from “low value to high-value work” is also part of the DoDs’ Big Data Platform (BDP), which will handle petabytes of data involved in a number of cross-agency projects. The platform “provides the ability to perform aggregation, correlation, historical trending,” and may perform pattern recognition to “predict attacks.”
Global crypto finance firm XBTO International (XBTOI) has gained legal status in Bermuda. XBTOI acquired a Bermuda Monetary Authority License under the island’s 2018 Digital Asset Business Act according to a statement.
Moving to Bermuda in April 2018, XBTOI is the third firm to receive a license from the regulator to date.
Per its domain, XBTOI operates on multiple finance fronts including over the counter desk trading, consulting, asset management, and VC work. The firm is looking to capitalize on the licensing with new product rollouts concerning digital asset solutions.
Solutions, it said, that were not available in other countries.
Commenting on the announcement, Chief Operating Officer Julien Auchecorne pointed out the importance of growing within Bermuda’s friendly regulatory environment:
“Our local commitment extends beyond our own office presence and working relationships with service providers on the island. We presently have a mandate to expand our office following our license obtention and remain committed to collaborating with all Bermudian stakeholders to explore how we can educate the island on the Digital Assets industry.”
XBTO first launched in 2015 under the name XBT, a play on the original bitcoin ticker symbol. The firm maintains offices in Paris and New York.
Smart Valor has secured a fresh $3.25 million round of investment, led by Venture Incubator, alongside Tally Capital and other Asian and U.S. investors.
With the news, the Zug-based startup is also announcing a new exchange operating from both Switzerland and Liechtenstein that will provide custody, trading and brokerage services. Initially, the exchange will offer BTC and ETH, each of which can trade against the fiat currencies CHF, EUR, GBP and USD.
Smart Valor CEO Olga Feldmeier told CoinDesk in an email:
“Today, Switzerland is the largest global wealth destination, home to a quarter of all global offshore wealth. For over 200 years this place stands for data privacy, safety and security, with an impeccable reputation and high-quality banking services. The same is true for Liechtenstein. But until today, ironically enough, neither Swiss Crypto Valley, nor Liechtenstein, had an exchange offering trading and custody of digital assets. Smart Valor is changing this, giving the privilege of stable, safe-haven jurisdiction not only to the rich, but to all.”
Smart Valor was approved as a regulated financial intermediary in Switzerland late last year. Venture Incubator is a joint initiative of ETH Zurich and consulting firm McKinsey & Company, and has backing from 10 of Switzerland’s most significant companies.
With the basic exchange now live, more tokens will be added monthly, with the goal of making it a leading exchange for security tokens backed by real-world assets, the company said in a press release.
“While hundreds of exchanges were created during the last several years, today there are just about a dozen which are legal, compliant, licensed and safe,” Smart Valor investor David Johnston said in a statement. “Switzerland, being at the top of the hierarchy of financially savvy but crypto-friendly jurisdictions, needs its own Coinbase.”
The exchange’s launch is accompanied by a campaign that gives initial users fee-free trading and brokerage services during the first three months. Not surprisingly, the full capacity of the early access program has been taken up by 5,000 users registered on the platform prior to today’s launch.
Feldmeier said in a release:
“This brings us a huge step forward to our vision of becoming the world’s first security token exchange for alternative investments.”
The cash-counting machines were softly buzzing in an office with floor-to-ceiling windows overlooking Moscow’s landmarks.
“Hear that sound?” asked the head of an over-the-counter (OTC) cryptocurrency trading desk — let’s call him ‘Oleg’ — who requested his real name and company be withheld. “You can hear it 24/7 in here.”
Business is brisk thanks to a constant flow of Chinese merchants who come in daily with heavy bags of cash. Oleg said his OTC desk sells about $3 million worth of crypto every day. Most of it usually goes to China. But what’s perhaps most surprising is which crypto.
Only 20 percent of Oleg’s sales are in bitcoin, the oldest cryptocurrency with the largest market capitalization. The other 80 percent is in the dollar-pegged token known as tether, or USDT.
Tether’s best-known application is allowing crypto traders to move money between exchanges quickly to take advantage of arbitrage opportunities. But according to several Moscow OTC traders, it has at least one real-world use case – as the go-to remittance service for local Chinese importers.
The total volume of USDT purchased by Chinese businesses can reach $10 million to $30 million daily, these traders said.
“They accumulate a lot of cash in Moscow and need tether to transfer it to China,” said Maya Shakhnazarova, head of OTC trading at Huobi Russia, the Moscow office serving high-roller clients of Singapore-based exchange Huobi Global.
It’s a simple process.
“A client comes with cash, we register the price at exchanges, when we agree on a price, we make a deal,” Shakhnazarova told CoinDesk. “The client hands over cash and a wallet address, the seller sends USDT to the wallet.”
Why tether? It has the usual advantages of crypto – no limits on how much money can be sent or where – without the volatility that makes most coins infeasible for moving millions across the border daily.
Despite longstanding questions about USDT’s purported dollar backing, exacerbated by the New York State Attorney General (NYAG) court case against the issuing company Tether, the stablecoin usually trades around $1.
The tether-for-rubles purchases often take place in offices like Huobi’s in the steel-and-glass skyscraper district of Moscow City.
“There are a lot of OTCs here in Moscow City, a bunch of offices in every building, and the volumes for them all can reach several dozens of millions of dollars a day. It’s all paid for in cash,” Shakhnazarova said.
Tether’s killer app
Chinese grey-market importers used to rely on bitcoin before the 2018 bear market, another OTC dealer, Roman Dobrynin, told CoinDesk. As the price was ever-growing, merchants and the intermediaries helping them buy crypto could make some extra money along the way.
But since the beginning of 2018, hoping that your bitcoin will still be worth the same or more at the end of the transfer became too risky.
“As the price was going down, tether became much more convenient to use,” said Dobrynin. “China is totally reliant on USDT, they trust in it a lot, plus it’s very liquid.” His own clients are mostly Chinese, and they usually find him by word of mouth, connecting via Telegram.
To buy or sell USDT for dollars from Tether itself, a trader must be verified through the company’s know-your-customer (KYC) process. However, since the token runs on top of public blockchain networks (bitcoin, ethereum and tron), anyone can receive or send it, and secondary trades are unrestricted.
Tether did not respond to requests for comment by press time.
Back in China, the merchants can exchange USDT for fiat easily, even though the People’s Bank of China banned fiat-to-crypto spot trading in September 2017, forcing the exchanges to move out of the country and limiting trading to crypto-to-crypto pairs.
Chinese traders who need to liquidate crypto assets into Chinese yuan can still go to an OTC market maker, such as those registered on exchanges like Huobi and OKEx, to get matched with buyers and send them crypto after receiving a wire transfer via a bank, AliPay or WeChat Pay.
Critics of Tether have long questioned whether the stablecoin was fully backed 1:1 with dollars, as the company long insisted. The NYAG case revealed that Tether had loaned a big chunk of its capital reserves to Bitfinex, an exchange with overlapping management and owners, leaving the coin only 74 percent collateralized by cash and equivalents.
None of this seems to faze the Moscow traders or their Chinese clients.
“Nobody actually cares if tether is backed or not,” says Konstantin Plavnik, chief operating officer of Moscow-based crypto derivatives exchange Xena. Confidence in Tether’s solvency relies on long-time habit and convenience: this market needs tether, so tether is trusted.
OTC traders also point out that USDT’s daily volume exceeds its supply in circulation several times over, which indicates that people turn the token around multiple times during the day. For example, according to CoinMarketCap, on July 29, the 24-hour volume of USDT was recorded at $17.5 billion, while the total supply was just around $4 billion.
The turnaround of tether is fast, so for the merchants using the token for remittances, whether it’s worth something or not matters only within one day. Large batches of USDT get transferred to China overnight and then exchanged for yuan, crypto entrepreneurs in Moscow told CoinDesk.
“USDT will stay propped by the power of habit and trust of its users,” said Vladislav Bulochnikov, the head of product at crypto wallet app provider Chatex. “Even if it loses half of its backing — it’ll still be out there.”
Skirting capital controls
Stepping back, the Chinese government maintains strict capital controls, limiting the amount of foreign currency anyone can buy or sell to $50,000 a year. People can apply for an additional quota, but still the amount of currency they can buy and sell will be limited. In this situation, some Chinese have opted to use crypto to move money across the border, Bloomberg reported in 2017.
The fact that Chinese merchants bringing cheap goods to Moscow’s shopping malls use crypto to move money around was all but officially recognized by the Russian authorities last year.
Several large malls in the city account for around $9.5 billion of unregulated cash flow monthly, and most of the merchants are from China, said Yuri Polupanov, the Bank of Russia’s head of financial monitoring and currency control, during an event hosted by Thomson Reuters in Moscow in April 2018.
These malls, located inside huge warehouses on the outskirts of Moscow, host multiple retail stands, selling mostly clothing, usually for cheap and for cash. They are shopping Meccas for people who can’t afford to spend much on their wardrobes and avoid even mass-market chain stores.
“We see most of the revenue turned into cryptocurrency, which is not reported in any way at the moment,” Polupanov said at the Thomson Reuters event, according to the RBK news agency. “We see simultaneous transfers of that cryptocurrency via email to the homeland of those merchants and producers, and the following exchange of it for the local currency there.”
According to a March 2019 report in the Russian newspaper Novaya Gazeta, cash would be received at places like a hotel called “Druzhba” (“Friendship” in Russian), located next to the shopping mall named “Moscow.” Then this cash would be swapped for crypto and sent to Hong Kong.
The wholesale trade offices at Druzhba could be turning around $10 million to $12 million daily, Novaya Gazeta’s sources estimated.
The operations were ceased for a short time after police raided the hotel, along with the malls mentioned by the Bank of Russia, in March of this year.
Small crypto desks are still functioning at those malls, OTC trader Dobrynin believes, though they likely don’t provide the volumes merchants need.
Outside traders are often afraid to go to those areas to make deals as things can get dangerous there, he said, explaining:
The European arm of Japan-based cryptocurrency exchange bitFlyer has launched a bitcoin buying and selling service aimed to be easier to use than spot trading exchanges.
BitFlyer Europe announced the news on Tuesday, saying the new trading platform targets people wanting “a simple way to buy and sell bitcoin, from total beginners to experienced traders.” Until now, the firm offered only a pro-trader service, dubbed Lightning, as its euro-bitcoin marketplace.
Available via the bitFlyer Europe website, the “bitFlyer Buy/Sell” service allows users to exchange bitcoin for euros, with a maximum of 20 BTC per transaction.
According to its website, the service is not an order book exchange and users will pay no fees on sales or purchases of bitcoin. Presumably, in that case, bitFlyer is making its money on the spread between its own buying and selling prices.
Indeed, while the global average price for bitcoin displayed on crypto data service CoinMarketCap is €8,526 at time of writing, bitFlyer is offering sales at €8,727.
On sign-up, new users are expected to check a box indicating they are not residents of the U.S. Standard know-your-customer procedures request personal details such as address and phone number, as well as an identity documents like a passport or driving license.
The firm describes itself as the “only” crypto exchange to be licensed in Japan, the U.S. and the EU.
Andy Bryant, co-lead and COO of bitFlyer Europe, said:
“bitFlyer Buy/Sell is a virtual currency exchange for everyone – with simple two-click buy and sell capability. Not only is bitFlyer Buy/Sell easy to use, but with us users have the confidence that they are using a trusted, regulated platform with long-standing global heritage.”
Solana claims to be first web-scaled blockchain
Per the release, the funding round was led by Multicoin Capital, with participation from Distributed Global, Blocktower Capital, Foundation Capital and Blockchange VC, among several other companies.
Solana claims that the platform is the first web-scale blockchain, since they believe it to be the first solution capable of hosting applications with computational bandwidth akin to the modern internet. Per the press release, the Solana network can support 50,000 transactions per second.
“Solana is the closest thing to the ‘world computer’ blockchain developers conceptualized in the early days of crypto,” said Kyle Samani, co-founder and managing partner of Multicoin Capital. He adds that Solana will allegedly scale on the base layer without sharding, explaining:
“While many developers have proposed sharding solutions for scaling existing layer 1 solutions, they introduce a tremendous amount of complexity and create new user experience problems that are difficult to solve.”
Solana is also launching its development network, where developers can now download the dedicated software development kit and start building decentralized applications based on the new chain.
The press release also claims that Solana is the first multi-threaded blockchain and that it is optimized to run on graphics processing units processing many transactions in parallel.
“Other than Solana, all blockchains are single-threaded processors,” explains Anatoly Yakovenko, Solana’s co-founder and project lead. “That is, they can only make one state update at a time. By architecting a system designed from the ground up to support concurrent processing, and by optimizing computation for massively parallel GPUs, Solana can process 50,000 TPS across a network of 200 nodes—and it does so without creating any additional overhead in terms of UX, latency, or composability for developers.”
As Cointelegraph reported in May, Ethereum co-founder Joseph Lubin said that the Ethereum blockchain will become about 1,000 times more scalable in 18 to 24 months, after changing to PoS.
Bitcoin wallet and blockchain explorer provider Blockchain just launched its first exchange platform.
Blockchain’s head of retail products, TD Ameritrade alum Nicole Sherrod, told CoinDesk the custodial exchange, called The PIT, can connect to non-custodial Blockchain wallets for nearly instant transfers. Registration opens today, with the ability to trade up to 26 assets rolling out over the next two weeks.
Sherrod said that with nearly 40 million wallets already created – and an exchange matching-engine set up in London’s Equinix LD4 data center – PIT could be posed to attract more liquidity than competitors.
“That’s what market makers are looking for,” Sherrod said. “They want to co-locate [data center servers] with you, they want to directly connect to your matching engine. It’s the way it’s done on Wall Street.”
Indeed, Tom Haller, previously the chief software architect for trading systems at the New York Stock Exchange, contributed to the development of PIT’s matching engine.
Sherrod added the exchange will measure speed in “microseconds,” like traditional asset exchanges. However, an anonymous industry expert was skeptical about whether that theoretical speed with remain constant under real pressures. The source said many infrastructure dependencies are “almost impossible to model out,” so the system will only prove itself when tested by “real-world trading volumes.”
Either way, Blockchain is prioritizing diverse token offerings over margin trading options and the bitcoin software update SegWit, both of which are also on the road map.
“Beyond the 26 [assets] we already know what our phase two asset listings are going to be, as well as phase three,” Sherrod said, declining to name any assets beyond what the wallet already supports.
It remains to be seen how PIT will compete with mainstream exchanges like Binance and Coinbase, which also offer a plethora of crypto assets. Coinbase was also a wallet provider and brokerage, before it became Silicon Valley’s iconic unicorn exchange.
“We’re looking to compete on the overall client experience,” Sherrod said, adding that a new customer support team has become the second-largest division of the company as part of a broader shift to exchange services.
Mainstream exchanges are generally slow to respond to retail users when market activity spikes, so Sherrod argued that beyond speed this is another area where PIT could rival incumbents.
Only time will tell if the new revenue flows Blockchain users generate through transaction fees will justify this expansion into the heavily saturated exchange space, with fierce competition for market makers and heavily regulatory costs.
Blockchain is applying for new licenses in various jurisdictions, Sherrod said, but failed to specify which ones. In the meantime, the exchange won’t operate in any jurisdiction that requires a license, a spokesperson added.