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Many bitcoiners are former gold bugs who believe in “hard money,” so one crypto company is hoping digitized gold will attract more traders.
Paxos, the New York-based exchange and stablecoin issuer, just launched a gold-backed crypto asset called Pax Gold (PAXG), with each ethereum-based token encapsulating the legal title to a physical bar of gold stored in the Brink’s London vault. Pax Gold has been approved by the New York Department of Financial Services.
“It’s not a representation of the commodity, it’s actual legal title to it,” Paxos CEO Chad Cascarilla told CoinDesk. “This is the exact point of the blockchain, the exact premise, that you can now make [assets] easily moveable and divisible and not be tied to a manual, physical process.”
Each token costs the same as an ounce of gold and can be redeemed for a physical bar at partnering institutions such as Bullion Exchanges in New York. Cascarilla said Paxos will expand its list of global partners from the traditional commodities industry to ensure users can claim real gold even if they’re not in London or New York. Plus, the crypto loan startup SALT now offers PAXG-backed loans as well, available in fiat or stablecoins such as PAX, TrueUSD or USDC.
“We’re going to do more products like this where we are taking real-world assets and putting them on the blockchain,” Cascarilla said.
Still, it remains to be seen whether tokenized gold will appeal to crypto enthusiasts. Messari co-founder Dan McArdle told CoinDesk that assets issued by and custodied with centralized entities don’t rival bitcoin’s role as “digital gold.”
“Bitcoin achieves all of gold’s relevant properties, plus a lot more, and is just better gold for the modern era,” McArdle said. “Bitcoin achieves its properties precisely because it has no centralized or federated anchors to the physical world. You simply can’t get the trustless/uncensorable properties of bitcoin if some relatively small set of people/entities has to manage physical objects represented on a blockchain.”
Paxos will need to find an audience of gold traders who are interested in crypto beyond bitcoin, as traditionalists on both sides are wary of tokens.
Bitcoin skeptics like Roy Sebag, founder of the precious metals custodian Goldmoney, don’t believe a self-custodied, relatively fungible cryptocurrency would bring new and compliant use cases to the broader gold market. It still requires a know-your-customer process.
“There’s zero value being added in terms of a decentralized blockchain,” Sebag said. “A closed system that is permissioned would be fine. We’ve already been doing that for five years.”
Indeed, the World Gold Council estimated gold-backed financial products like exchange-traded funds accounted for nearly $100 billion of the global market holdings in 2018. Paxos’ commodities trading platform, Post-Trade, secured a chunk of that pie by processing precious metal trades since July 2018. Now, with Pax Gold, retail investors will be able to participate in a broader range of digital gold trades beyond institutional platforms.
“We’re acting at that gateway, as a trusted holder of the assets, but also has trusted verifier of participants,” Cascarilla said. “Just like our Pax stablecoin, it’s audited.”
For traders who might want to buy gold on-the-go and then pick it up in another location, Cascarilla believes Pax Gold could offer a regulated alternative to physical ownership.
“You can own that gold but you don’t have to pay a custody fee, and you can send it around the world 24 hours a day, 7 days a week,” he said. “This is a groundbreaking product in the history of gold.”
Tyler and Cameron Winklevoss’ Gemini crypto exchange just added off-chain and over the counter trade negotiations on its platform.
The features come via Gemini Clearing, an electronic settlement system. According to the firm’s blog posting, Gemini Clearing allows Gemini accounts to negotiate and settle trades between Gemini accounts.
“Such trades can either be arranged bilaterally between two parties or brokered via a third party,” the company said. “Gemini Clearing provides regulated clearing and settlement services for such pre-arranged trades, which helps to ensure timely settlement and mitigate counterparty risk.”
In essence, Gemini Clearing acts as an escrow service for cryptocurrency traders looking to take advantage of Gemini’s customer services.
To be clear, Gemini does not have an OTC desk but rather supports OTC desk trades with the new product.
Based out of New York, Gemini offers six cryptocurrency products including bitcoin, litecoin, bitcoin cash, ethereum, zcash, and the exchange’s stablecoin, the gemini dollar.
Gemini says the new product falls under the exchange’s know your customer/anti-money laundering (KYC/AML) policies, which it holds as the industry standard.
Samsung Electronics is releasing a new edition of its Galaxy Note 10 smartphone that will come with a pre-installed cryptocurrency wallet in its bid to boost adoption of blockchain tech.
According to a Wall Street Journal article on Thursday, the new product is a variant of Samsung’s flagship product Galaxy Note 10 but marketed as a “KlaytnPhone,” named after a blockchain network developed by messaging giant Kakao.
To be sold on Thursday only in South Korea, the new edition’s hardware specification will not differ from existing Galaxy Note 10, but will come with blockchain apps and a crypto wallet, the report said. Buyers of KlaytnPhones will also obtain a certain amount of the Klaytn blockchain’s native cryptocurrency Klay.
While blockchain apps on the Klaytn network are now available for non-Samsung phones via Google’s Android system, only the Klaytn edition will support full-scale transactions on the Klaytn network.
The KlaytnPhone is another step taken by Samsung to widen its efforts on boosting cryptocurrency adoption. According to the report, Samsung has joined Ground X to launch the edition, a firm set up by Kakao to develop the Klaytn network.
While the Klaytn network has been live since June this year, its native crypto Klay has not yet been listed on exchanges for trading.
Samsung first revealed a crypto-friendly flagship smartphone in March this year, the Galaxy S10, which comes with digital wallets that support cryptocurrencies like ether (ETH) and ethereum-based ERC-20 tokens.
The People’s Bank of China (PBoC) is charging full speed ahead with its digital currency plans, hoping to beat Facebook’s Libra to market.
A dedicated team from the central bank’s Digital Currency Research Lab is now developing the system in a closed-door environment, away from the PBoC’s downtown Beijing headquarters, a person close to the bank told CoinDesk.
The team has been working in this separate location since early summer so they could fully concentrate on the project, this person said.
The work has been expedited as Facebook unveiled in June its vision for Libra, a global cryptocurrency to facilitate payments, the source added.
The Libra announcement rattled governments around the world, spurring Congressional hearings in the United States and bold new thinking by central bankers such as Bank of England Governor Mark Carney.
Much about the PBoC’s project remains under wraps, and there have been conflicting accounts about the timetable and the degree of involvement by major Chinese companies.
According to a Sept. 4 report by state-owned media outlet China Daily, “closed-loop testing” has begun for the central bank digital currency (CBDC) to simulate payment scenarios involving “some commercial and non-government institutions.”
If things go well, the project could launch sooner than Libra, which is targeting the first half of 2020 for its debut, China Daily said in an earlier report.
Forbes reported last week that China’s big four state-owned commercial banks, as well as fintech giants Alibaba, Tencent, Union Pay, and an unnamed company, will be the first batch of organizations to receive the CBDC. It could be launched as soon as November, Forbes said
The four commercial banking giants are Bank of China, China Construction Bank, Agricultural Bank of China, and the Industrial and Commercial Bank of China, which is one of the largest banks in the world by total assets.
But hours following Forbes’ report, Chinese publications Tencent News and Sina said the timeline and scope of the eight institutions were “inaccurate speculations,” citing people close to the central bank.
And yet, a second source who is familiar with the PBoC’s CBDC efforts told CoinDesk that organizations mentioned in the Forbes report have indeed participated in the development of the CBDC initiative. But the source would not say whether all or only some of the mentioned institutions will be receiving the state-backed digital yuan upon the launch.
A third person who works for one of the mentioned institutions said there’s such work ongoing inside his organization but it’s unclear what the actual contribution is since the details are confidential due to non-disclosure agreements. The mentioned organizations did not respond to CoinDesk’s request for comment.
Whenever the CBDC launches, the central bank may not roll it out nationwide on Day One.
Chinese state-owned publication Global Times said last week, citing industry sources familiar with the matter, that the system may be launched in Shenzhen first to test the waters. There, local companies including Tencent and state-owned financial institutions are researching technical frameworks to support the development of the CBDC.
The PBoC’s Digital Currency Research Lab previously launched an entity called Shenzhen Fintech Research Institute with Shenzhen’s local government and financial regulator to undertake fintech and digital currency-related projects.
The institute has also been on a hiring spree with job advertisements looking for various technical experts including blockchain architects and cryptography specialists to be based in Shenzhen and Beijing.
The PBoC’s Digital Currency Research Lab has filed more than 50 patent applications to detail the potential design of the state-backed digital yuan.
CoinDesk reported previously that based on the patent filings, the envisioned CBDC may only resemble a cryptocurrency at a surface level as a peer-to-peer transaction system but will strip off most cryptocurrencies’ anonymity and decentralization features.
Rainforest Foundation US is a New York-based, non-profit NGO working in Central and South America, which is now hoping to support anti-deforestation efforts with crypto and blockchain tech.
Deforestation and fires in the Brazilian Amazon
On Sept. 4, the Rainforest Foundation reached out to the crypto and blockchain community to ask for their support to fight against deforestation and forest fires in Brazil. The post on the foundation’s website states:
“Since Bolsonaro took office in January, deforestation in the Brazilian Amazon is up 75% and forest fires in the Brazilian Amazon have doubled compared to the past year. As guardians of our rainforests, its animals and its people, we are working with The Giving Block to form a coalition of crypto sponsors, donors and media partners who will help stop this devastation.”
Using blockchain to assure transparency
The Rainforest Foundation, which has musician Sting as one of their founders, is currently working on a blockchain pilot to assure continued transparency, which will allow donors to track the work done by the foundation in the Amazon rainforest and reward local communities who are protecting their forests with crypto.
The foundation is also researching the use of smart contracts to stop illegal logging, land trafficking and safeguard forests from gold mining.
Suzanne Pelletier, executive director at the Rainforest Foundation, said that the dire situation in the Brazilian rainforest has pushed them to come up with innovative solutions. She added:
“Business as usual has gotten us to this point. Philanthropy as usual won’t get us out. We need innovative solutions, and no one is more innovative than cryptocurrency users.”
Crypto and charity go hand in hand
Cointelegraph has previously reported that crypto and blockchain technology are increasingly being applied to support a wide variety of charitable organizations. In the wake of Hurricane Dorian, a blockchain company headquartered in the Bahamas is asking the crypto and blockchain communities to help them bring relief to the hurricane victims.
Argentina has reimposed capital controls, limiting citizens’ and businesses’ freedom to buy foreign currency.
As Bloomberg reported on Sep. 1, the increasingly troubled South American nation took the step as the Argentine peso (ARS) suffers overwhelming losses against major fiat currenciessuch as the U.S. dollar.
Argentina puts $10K limit on dollar access
Argentina has shown an affinity for Bitcoin (BTC) in recent times, with trade volumes accelerating as uncertainty around the economy grew. Last month, a premium appeared on the country’s cryptocurrency exchanges.
Now, access to hard currency is restricted to just $10,000 for individuals looking to dump ARS on the market, despite its exchange rate falling 34% in USD terms since Aug. 2.
Demand for Bitcoin, a cross-border asset which is impossible to control, should therefore increase further, some suspect.
“Buy Bitcoin,” cryptocurrency-focused attorney Preston Byrne tweeted following the news.
Draper may force Bitcoin switch
Argentina’s economic woes may not match those of Venezuela, yet Bitcoin advocates appeared to preempt the crisis months beforehand.
Should Draper win, he demanded Argentina shun the peso altogether, adopting Bitcoin as its new official state currency.
“That would be a perfect decision, as there’s a lack of confidence in this coin,” he reportedly commented at the time of the meeting in March.
Calibra, a digital currency wallet built by Facebook, is beefing up its compliance team as the company tries to convince U.S. and European regulators that the social media giant’s Libra project poses no legal threat. Now it’s bringing that conviction to the fore by hiring for a new compliance team to manage the many legal pitfalls it will face.
For example, the company is looking for a specialist that will “lead the identification and analysis of our regulatory requirement and create policies, procedures and controls to ensure Calibra is fully compliant with all Sanctions requirements.” The job posting appeared on Facebook’s career website overnight.
The sanctions lead will be working with Calibra’s legal and policy teams, interact with Facebook’s partners as well as the government agencies and regulators to ensure the product complies with worldwide requirements.
Facebook is also looking for additional brainpower to enforce Calibra’s general legal compliance efforts. One posting, for a Bank Secrecy Act and anti-money laundering (BSA/AML) leader, calls for a skilled banking executive to ensure Calibra’s policies “are designed to comply with BSA/AML related laws and regulations globally.”
Other related jobs currently open include head of compliance and a head of fraud. The career website is currently listing 27 jobs at Calibra alone, among the 47 jobs related to Facebook’s blockchain work.
All of these new hires aims to help Facebook engender trust in its system. The Libra project, announced earlier this summer with support from the world’s leading financial organizations, raised concerns worldwide. Congress grilled the project’s head David Marcus during two hearings, citing concerns for the project’s implications for the U.S. monetary system. They were also concerned with fraud prevention, and data privacy.
An anti-trust investigation into Calibra in the European Union did not make matters easier for Facebook. As now both the U.S. and E.U. authorities are concerned with the project’s scale and consequences, two out of 28 members of the Libra Association told FT they wanted out.
Facebook is also strengthening its lobbying efforts. As reported Tuesday morning, Facebook hired Washington D.C.-based lobbyist John Collins, previously the head of policy at Coinbase, to work on “issues related to blockchain policy.”
Earlier in August, Facebook also hired Susan Zook of Mason Street Consulting, who previously worked as an aid to Senator Mike Crapo (R-Idaho). Crapo chaired the Senate hearing dedicated to Libra on July 16.
California-based blockchain development firm Baton Systems has closed a $12 million Series A funding round led by Trinity Ventures.
According to a Ledger Insights report published Sept. 2, the new funding will be used to scale Baton Systems’ blockchain-powered bank-to-bank payment solution.
Interoperability with legacy systems
Baton Systems has reported that it already processes over $13 billion in payments implementing its solution for market participants and clearinghouse counterparties.
The firm’s blockchain platform is designed to be interoperable with legacy systems and doesn’t require clients to overhaul their existing business systems. As Baton Systems outlined in a statement:
“The Baton platform integrates with financial institutions’ current collateral and cash systems, leaving their existing business processes, systems, and ledgers in place.”
The blockchain software workflow coordinates between various systems and institutions to achieve transparent and efficient settlement of assets, together with instant reconciliation and reporting for all parties involved, the company has noted.
While using distributed ledger technology, the payments-focused solution does not involve cryptocurrencies or digital assets, Baton Systems’ CEO Arjun Jayaram emphasized.
According to the report, Baton Systems contributed to the Bank of England’s blockchain pilot for real-time gross settlement, which spurred the institution’s later decision to rebuild its RTFS system using the technology.
In a Barclays-hosted hackathon last year, Baton Systems won a prize for the best solution supporting the ISDA’s Common Domain Model (CDM) industry standard for derivatives. The firm later announced support for the CDM standard on its blockchain platform, allowing clients to efficiently connect their existing swaps and derivatives systems to the Baton platform.
Earlier this summer, the Italian Banking Association announced that Italy’s banks will integrate distributed ledger technology into internal settlement processes in a bid to improve transparency in interbank transactions and counterparty communication.
Bitcoin (BTC) could drop to $9,000 in the next 24 hours, having strengthened the short-term bearish case with a drop to one-month lows earlier today.
The top cryptocurrency by market value fell to $9,320 at 07:36 UTC today, the lowest level since July 28, according to Bitstamp data.
Prices fell 4.48% on Wednesday, confirming a downside break of a recent narrowing price range represented by trendlines connecting Aug. 20 and Aug. 26 highs and Aug. 15 and Aug. 22 lows.
Essentially, sellers came out victorious in a tug of war with the bulls, signaling a resumption of the sell-off from the Aug. 6 high of $12,325.
That bearish view has been bolstered by BTC’s drop to four-week lows below the July 15 low of $9,467. As a result, a deeper slide to levels below $9,000 could be in the offing.
As of writing, BTC is changing hands at $9,415 on Bitstamp, representing a 7 percent drop on a 24-hour basis.
The range breakdown and the drop to one-month lows have exposed July’s low of $9,049.
Supporting the bearish case are the downward sloping 5- and 10-day moving averages. The 14-day relative strength index (RSI) has also breached key support (horizontal line) and is reporting bearish conditions with a below-50 print.
What’s more, the cryptocurrency has also found acceptance below the 100-day moving average (MA) – a level which acted as strong support in the seven days to Aug. 27.
Further, the 50-day moving average is beginning to trend south in favor of the bears.
Trading volumes picked up as BTC dived out of the narrowing price in the U.S. trading hours yesterday. In fact, the selling volume witnessed in the four hours to 20:00 UTC on Wednesday was the highest since Aug. 7.
All-in-all, the stage looks set for a deeper drop in BTC. Acceptance below the July low of $9,049 would open the doors to $8,500.
The bearish case would be invalidated if the cryptocurrency finds acceptance above Wednesday’s high of $10,280, although, as of writing, that looks unlikely.
Weekly close is pivotal
Bitcoin’s weekly line chart shows the cryptocurrency has charted a double top bearish reversal pattern with neckline support at $9,533. As of writing, prices are trading below the neckline support.
The breakdown, however, would be confirmed, only if prices print a UTC close below $9,533 on Sunday. That would create room for a sell-off to lows below $7,550 (target as per the measured move method).
The double top breakdown, if confirmed, would imply an end of the rally from lows near $4,050 seen on April 1.
It is worth noting that that the moving average convergence divergence histogram has already confirmed a bearish reversal with a drop below zero – the first since February.
Automotive supplier Continental has unveiled an application called Earn As You Drive, which uses blockchain technology to monetize car user information.
Parking space data for digital currency
Forbes reported the news on Aug. 29. Per the report, Continental has partnered with tech firm Hewlett Packard Enterprise and open source network provider Crossbar.io to create Earn As You Drive. This application reportedly lets drivers opt in to earn digital currency for sharing information about street parking availability through vehicle sensors. The data is shared with a manufacturer, who in turn sends it to a third party parking service.
The new app relies on Continental’s blockchain-based Data Monetization Platform (DMP). As previously reported by Cointelegraph Brasil, Continental partnered with Hewlett Packard for this development, which was announced back in February. In addition to monetizing vehicle-collected data, the project also purportedly aimed to use the data to bolster driver confidence and safety.
Jaguar Land Rover’s experiment earning programs
Jaguar Land Rover has also been trialing an earning program with the Iota Foundation. According to the report, the company has been testing the program in Ireland, which allows users to receive IOTA cryptocurrency in return for sharing data.
As reported earlier today by Cointelegraph, Jaguar Land Rover and Iota are performing a demo of a new distributed ledger technology for tracking and sharing energy data. In addition to providing data on how much energy the Jaguar I-Pace uses, the platform also tracks the origins of the energy and can ensure that it originates from sustainable sources.
Blockchain-based data monetization in the home
As previously reported by Cointelegraph, the Energy network company E.On filed a patent application for a blockchain-based information collector that could be used for data monetization. The device would reportedly use sensors to collect user data from smart home applications, which users could then selectively sell to third parties.
Telegram’s new blockchain project will be compatible with ethereum, according to a tech startup building tools for the network.
The messaging company is expected to release the code to run a node on the Telegram Open Network (TON) on Sunday, allowing users to trial its project in advance of the project’s expected mainnet launch on Oct. 31.
TON Labs, a tech startup helmed by investors in Telegram’s token sale, is building a number of tools for developers to help them build on the new network. One of these tools will be a Solidity compiler, which will allow decentralized applications built for ethereum to also run on TON, said TON Labs CEO and managing partner Alexander Filatov.
Filatov told CoinDesk:
“That was probably the most difficult thing we built. It will allow the advanced Ethereum community to pull everything they wrote for ethereum into TON.”
The compiler has been in testing since July, he said.
As mentioned, TON is expected to launch by Oct. 31. If it does not, Telegram will have to refund investors in its token sale, according to its user agreement. Sunday’s release, therefore, is expected to be the last in a series of testnet releases.
Filatov said Sunday’s code release will be the most important stage of TON’s rollout, saying:
“We have very little time between the node release and the mainnet launch to test, identify and fix possibly bugs and vulnerabilities.”
Code for a light client was shared with investors earlier this year and immediately leaked to the general public. Filatov said this client allowed users to play around with some of the TON blockchain’s basic functions.
“You can play with GRAMs [the network’s token], write a simple smart contract talking to the node via a light client [and] create a wallet,” Filatov said.
Telegram raised at least $1.7 billion in 2018 for its hotly anticipated blockchain. The six-year-old messaging service claims to have over 200 million active users.
Academic interest in crypto and blockchain is increasing across the board, according to a study from Coinbase published Wednesday.
The crypto exchange looked at the world’s top 50 universities (according to the U.S. News & World Report ranking) and found that 56 percent have blockchain or crypto classes available. Last year, Coinbase found 42 percent to offer such classes.
Working with survey site Qriously, Coinbase also surveyed 735 students ages 16 and older, finding a 6 percent uptick in student interest in crypto or blockchain coursework. As part of last year’s Coinbase study, 28 percent of respondents said they would be interested in such a class.
Moreover, compared to last year, twice as many university students, or 18 percent, partook in a crypto or blockchain class.
Of special note, said Coinbase, is the percent of crypto or blockchain classes not falling under the traditional computer-science label. Coinbase said 70 percent of these classes pertained to other departments – particularly finance, economics, law or engineering.
Crypto classes by department. (Image via Coinbase)
Student clubs are also a major driver of academic interest. Coinbase said 41 of the 50 universities had student-run groups related to crypto or blockchain.
As the Coinbase post put it:
“This interest in studying crypto at colleges and universities speaks volumes about the future of money.”
A year after China banned local fiat on-ramps for crypto exchanges, Chinese traders continue to drive the market forward by using the dollar-pegged stablecoin tether (USDT).
“Crypto trading businesses are restricted from accessing banking services in China, but they are thriving nonetheless,” Dragonfly Capital Partners co-founder Alexander Pack told CoinDesk.
Traders generally work around such banking restrictions by using stablecoins. According to CoinMarketCap, USDT activity reached an all-time high this month with a global market cap exceeding $4 billion. Tether is reportedly used in between 40-80 percent of all transactions on the exchanges Huobi and Binance, the latter of which now offers loans based on USDT collateral.
But since this asset is favored among over-the-counter (OTC) traders, official exchange volumes hardly paint a complete picture.
Blockchain data from CoinMetrics tallying a full year of transactions detected an annual peak in activity on Aug. 7, with 78,100 active wallets for USDT and nearly 21,300 for the ethereum-based counterpart USDTe. In fact, according to data site ETH Gas Station, Tether paid nearly $261,000 in fees to ethereum mines just to run this secondary version of the stablecoin. (Another Tether-issued stablecoin is on the way, this time pegged to the Chinese yuan.)
All things considered, USDT brokers have carved out a lucrative niche in 2019, especially brokers that provide fiat liquidity.
“Tether has truly good liquidity in China,” a Chinese investor speaking on the condition of anonymity told CoinDesk. “One of the primary use-cases is a fiat on- and off-ramp for crypto trading. I did also see some people using tether for legit business use-cases like cross-border trading.”
On the other hand, two different Asian OTC traders, who requested anonymity to protect their businesses, told CoinDesk a significant portion of their traction comes from Chinese clients using USDT to move assets beyond their homeland’s strict capital controls.
“This has always been a significant part of OTC flows in crypto,” one Hong Kong-based trader said. For example, his desk conducted $45 million worth of trades on Aug. 6, with UDST representing more than half the volume.
Experts believe this surge in USDT usage may be driven by enthusiasm for a potential bull market return, rather than any changes in capital flight patterns.
“Tether is the easiest way to hold a relatively stable volume of value at an exchange that doesn’t accept dollars,” the U.S.-based trader said. “It’s much more about that [USDT] network effect than any technology, infrastructure or other advantage.”
In short, OTC traders provide fiat on-ramps to USDT, although this is a gray market within Chinese borders. Then Chinese traders use USDT to liquidate their broader portfolios on global exchanges like Binance, Huobi or OkCoin. This affects the bitcoin market because traders and exchanges generally use the godfather cryptocurrency for fiat liquidity beyond OTC. Exchanges like Kraken and Bitfinex offer such bitcoin trading pairs.
However, the anonymous trader in Hong Kong noted this isn’t the only way Chinese traders are influencing the broader market, adding:
“There are billions of dollars coming out of China that have nothing to do with capital controls.”
For example, the Antigua-based FTX crypto futures market that launched in April now facilitates between $50 million to $300 million in daily volume, according to CEO Sam Bankman-Fried. He told CoinDesk the bulk of those 10,000 FTX users hail from China and are served out of an office in Hong Kong. (Consequently, USDT futures contracts are among the top performers.)
The asset’s relative stability in 2019, oscillating only a few cents in August despite spikes in demand, may seem remarkable given the legal counsel for its namesake issuance company admitted this stablecoin is not backed one-for-one by U.S. dollars. Plus, the issuer’s sister company, Bitfinex, faces legal scrutiny in New York over allegedly misusing USDT to cover company losses.
Yet the anonymous Chinese investor said many traders saw the Bitfinex initial exchange offering this summer as a “bank bailout” to the tune of $1 billion, one which insured the continued reliability of USDT.
“Many users understand that Bitfinex is behind Tether and that’s incredibly important in the industry,” she said. “[Bitfinex] is one of the most non-compliant exchanges out there, but the nature of that tends to attract a lot of support from hardcore bitcoiners.”
Malta-based crypto exchange Binance wants to spur greater research in open-source blockchain development.
To that end, the exchange unveiled Binance X on Thursday, announcing that it was funding more than 40 developers conducting research into open-source crypto software. Binance X also hopes to facilitate collaboration in the Binance ecosystem by providing resources to projects in various stages of development and tap blockchain “evangelists” to foster education around the space.
For promising developers, Binance X offers a fellowship program focused on research and development of open-source blockchain software. More than 40 project leads have already signed on as Binance X fellows, though the exchange has not revealed how much funding these individuals will receive. Applications are accepted on a rolling basis.
The platform is designed to serve as a cryptocurrency-focused counterpart to X Development, the research and development subsidiary of Google parent company Alphabet. In addition to providing financial support, Binance X is also rolling out educational initiatives for developers and the public.
“The Binance X team will help educate, create opportunities for collaborations and jumpstart growth of these projects via the different programs and resources we have at Binance,” Teck Chia, head of Binance X, said in a statement.
By leveraging the existing ecosystem – including Binance Chain, Binance.com APIs, Trust Wallet SDKs and the Binance Charity donation platform – Binance X says it will support educational advancement at every level “from noobs to seasoned developers.”
To draw in these “noobs,” Binance X’s sponsored evangelists will host blockchain workshops and reading groups at colleges and similar venues to recruit and educate individuals.
Swiss financial authority FINMA offered guidance this week on anti-money laundering (AML) requirements for blockchain-based companies even as it granted broker-dealer licenses to two new blockchain companies.
FINMA considers AML to be “technology-neutral” and expects all payments, including blockchain transactions, to follow the requirements. The gist is simple: “Institutions supervised by FINMA are only permitted to send cryptocurrencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive cryptocurrencies or tokens from such customers,” the regulators wrote.
FINMA oversees Switzerland’s financial system, from banking to securities dealers and even Facebook’s cryptocurrency project, Libra. Earlier today it was reported FINMA officials met with U.S. Congressional Representatives over Libra.
“FINMA-supervised institutions are thus not permitted to receive tokens from customers of other institutions or to send tokens to such customers,” they wrote. Further, FINMA does not allow the passing of tokens from unregulated wallets and requires AML information for all parties.
In addition to this announcement, FINMA has issued the first “banking and securities licenses” to two blockchain companies, SEBA Crypto AG and Sygnum AG. These are the first companies registered in Switzerland as broker-dealers with a specific blockchain focus. These companies will be required to follow the new AML rules.
The Australian Securities Exchange (ASX) is teaming up with fintech firm Digital Asset and VMWare to move its current exchange platform onto distributed ledger technology.
Announced today, ASX and Digital Asset have signed a three-party memorandum of understanding (MOU) to build a replacement platform for the existing Clearing House Electronic Subregister System (CHESS) onto DLT. MOUs are usually non-binding documents that point to a company’s intention
Begun in 2015, ASX plans on the new DLT-platform to be up and running by Spring 2021. As of now, 30 to 40 percent of the new platform is available to replace CHESS.
Speaking with ZDNet, ASX deputy CEO Peter Hiom said ASX said the MOU will help it expand both product offerings and service locations across Australia and New Zealand:
“This new partnership is a very positive development that will help us support a wider range of DLT solutions developed by the industry. It confirms our belief in the potential of DLT as we remain on track to deliver the CHESS replacement system in March-April 2021.”
ASX is also using Digital Asset’s open-source, blockchain-focused language DAML for the project.
ASX’s current platform handles some AU $2 trillion in registered equities along with AU $5 billion processed per day.
This essay is presented as a part of No Closing Bell, a series leading up to Invest: Asia 2019 focused on how the Asian crypto markets are interacting with and impacting global investors. To keep the conversation going in person, register for Invest: Asia 2019 coming up in Singapore on Sept. 11-12.
Stablecoins are prevalent at all levels of crypto transactions these days, from the largest spot markets on exchanges like Binance to the trading pair of choice by many Hong Kong and mainland China OTC desks. The reason for the demand is simple: stablecoins provide a bridge between the fiat and crypto worlds.
However, not all stablecoins are the same. From currency peg to counterparty risk, there are two competing models duking it out at the moment: trusted and trustless stablecoins, with each referring to different levels of counterparty collateral risk.
We prefer trustless stablecoins as that model eliminates the counterparty risk of needing to trust a company, auditor, bank and humans in general.
The top 5 stablecoins in the market are all pegged to the US dollar and while USD is a reserve currency, that market is quite saturated already. In contrast, the opportunity in the other 180 fiat national currencies used by the majority of the world has barely been realised. That’s where the next frontier for stablecoins is.
In operating Bitspark in many emerging markets we have heard first hand from individuals, NGOs and companies how bank collapses are somewhat common and trust in government and banking is rock bottom. Access to digital cash that’s publicly visible and under the ownership of the individual would eliminate these problems and this is what Bitspark has been pioneering with PHP, IDR, VND pegged stablecoins for our remote money exchange agents.
Unique trading opportunities
There are interesting trading opportunities here too. Exotic currencies around the world almost always depreciate against the US dollar with recent examples found in Venezuela, Argentina, Turkey, Zimbabwe and Iran.
A good trade here would be to short those currencies via placing a dollar stablecoin as collateral to back the issuance of these currencies and then selling them for dollars. Bitcoin traders, merchants, and individuals need to use these currencies everyday anyway, so there is a market of buyers to which issuers can sell to.
Over time as the issued currency depreciates, the collateral value backing it becomes more valuable relative to the issued currency, enabling the issuer to withdraw or exchange excess collateral. Having already sold their issued coins on Day 1, they have effectively shorted the exotic currency without having to deal with any questionable local custodian – that’s almost impossible to do within traditional financial services
At Bitspark, we are creating trustless stablecoins for every currency in the world having recently launched an exciting product with Stable.PHP, a stablecoin pegged to the Philippine Peso backed by BitUSD (the first and oldest stablecoin in existence) using the Bitshares protocol.
I will be discussing more about some of the trading opportunities in taking short positions on Stable.PHP at this year’s Invest.Asia conference in Singapore. For example, when your collateral is BitUSD and you are issuing an exotic currency like Stable.PHP, you can take a leveraged position long or short.
Our set of exotic stablecoins will only be expanding through the year enabling more people to access a digital financial system in their local currency.
Bitcoin wallet and blockchain explorer provider Blockchain announced a partnership with the largest bitcoin processor, BitPay.
According to a blog post published today, Blockchain will integrate BitPay’s payment architecture into its wallet service. This partnership will allow Blockchain wallet users to pay merchants online or on mobile.
BitPay processes approximately $1 billion in bitcoin alone every year for businesses and individual clients and over $2.8 billion in other cryptos for institutional clients since 2011. The firm has built an ecosystem of merchants that accept their payments – including Amazon, Delta, and Hotels.com – because, as a payment processor, it offers the option to settle in fiat currencies and provides invoices.
Likewise, Blockchain is often regarded as one of the world’s largest wallet providers with approximately 38 million users, of which more than half are located outside the United States. Further, the firm’s wallet users account for roughly a quarter of all on-chain bitcoin transactions.
“We’re excited to see this new addition connect our Wallet users to the world of merchants that accept Bitcoin (and soon other cryptos) as a payment method — one of the key ways to interact with and grow the digital asset ecosystem,” Blockchain writes in a statement.
Blockchain’s wallet service is non-custodial and offers an optional know-your-customer (KYC) verification for users who want in-wallet trading capabilities. Whereas, BitPay requires its users to undergo KYC requirements.
In July, Blockchain unveiled its crypto exchange platform the PIT, with optionality to connect the firms wallets for nearly instant transfers.
Circle CEO Jeremy Allaire says the U.S. lagging behind China’s development of a national digital currency could alter the way Western companies transfer payments.
Speaking on the Global Coin Research podcast this week, Allaire said China is setting the pace in the development of a digital currency equivalent of its fiat currency, the renminbi, and could soon bypass Western rules through direct settlements. Allaire also said Circle continues to be interested in the development of stablecoins, such as its USD Coin.
“[Circle] also believes that the major reserve currencies of the world, the major trade currencies of the world, would become digital currencies,” Allaire said.
“A digital currency version of renminbi that runs on software platforms that can be run over the internet, it really creates an opportunity for China and Chinese companies . . . and bypass the western banking system.”
Earlier this month, the People’s Bank of China announced it was wrapping up a year-long digital currency project.
Allaire said Circle, which launched a U.S. dollar stablecoin in 2018, is keeping its eye on China’s development. A digital renminbi, Allaire said, makes sense in view of the larger global financial picture:
“I think the broader concept of the internationalization of the yuan and the belt and road initiative and the desire to expand China role as a trade counterparty . . . digital currency is a natural path for that to grow.”
The U.S. Federal Trade Commission (FTC), has settled charges it filed last year against four promoters of crypto-denominated multi-level marketing schemes.
Following a federal trial in a Florida court, the operators of the fraudulent investment schemes are ordered to pay restitution and have been barred from operating or participating in other such MLM schemes, according to a statement made by the FTC on August 22.
Under the corporate names Bitcoin Funding Team and My7Network, the fraudsters promoted their crypto investment schemes by misrepresenting potential earnings. They used social media, YouTube and conference calls to promote the scams.
In one instance, investors were promised $80,000 in monthly income from an initial investment of $100.
Thomas Dulca, Eric Pinkston, Louis Gatto and Scott Chandler sat at the top of a pyramid scheme. In order to stay in operation, investors were encouraged to recruit new participants. Though promised large rewards, most participants “failed to recoup their initial investment.”
In addition to his promotion of Bitcoin Funding Team, Chandler advertised for Jetcoin, “which promised participants a fixed rate of return, but failed to deliver on these claims,” the FTC alleged.
Dulca and Pinkston are required to pay $453,932 and $461,035, respectively, though Pinkston’s, who is unable to pay the full amount, will be suspended upon payment of $29,491. Chandler is ordered to pay $31,000.
It is unconfirmed whether Gatto will pay a settlement for his involvement in the chain referral schemes.
In 2018, the FTC successfully petitioned the court to freeze the fraudster’s assets. The U.S. regulator also asked the court to order the defendants to stop working together or creating new business entities.
As part of the settlement, the men are barred from ever “operating, participating in, or assisting others in promoting or operating any multi-level marketing program, pyramid, Ponzi, or chain referral scheme.” They are also barred from misrepresenting investment opportunities.
Hotmine CEO Oles Slobodenyuk couldn’t have picked a better place to pitch his product: a bitcoin mining rig that doubles as a home heating appliance.
Irkutsk, Eastern Siberia, is famously cold in the winter, when subzero temperatures are the norm. So a few weeks ago, when Slobodenyuk took the stage at the Baikal Blockchain and Crypto Forum with one of Hotmine’s little white boxes in tow, he opened with a joke about the warm August weather.
“I was told that in Irkutsk, the average temperature of the air is minus 2 degrees Celsius, so I brought a radiator with me,” he said.
Eventually, Slobodenyuk told the crowd, Hotmine aspires to sell up to 200,000 of its devices to Irkutsk residents. But the Ukraine-based company’s ultimate ambitions are even greater.
“Our goal is to reach the point where 80 percent of all mining is done with the smart use of the hot air it’s producing, at the same time protecting the bitcoin network,” Slobodenyuk told CoinDesk, adding:
“We believe mining should become decentralized again, with a full node in every home.”
It’s a lofty goal, given that the four largest mining pools controlabout 60 percent of the total hashrate, or processing power devoted to securing the bitcoin network, according to BTC.com. But like bitcoin itself, Hotmine will seek to employ economic incentives to achieve its decentralist ideals.
According to Slobodenyuk, each Hotmine miner performs calculations at a rate of 8 tera hashes per second (th/s). With the current price of bitcoin, he said, 1 th/s earns about $7.20 a month, so a single heater can make about $55 for its owner while radiating heat for up to 10 square meters.
While the concept itself isn’t new — last year, a French company called Qarnot announced a CPU-based mining heater that earns ether, for example – Hotmine is focusing on a region where it’s likelier to resonate.
At the current prices for electricity in Irkutsk of 1-2 cents per kilowatt-hour, one heater needs less than $10 worth of power per month, so effectively the heat would be free, plus a modest income in bitcoin, Slobodenyuk said.
Even the coming halving, or periodic reduction in the amount of new bitcoin awarded to miners, won’t hurt this model, he claimed.
Hotmine started in 2013 – a lifetime ago in crypto time – with an experiment in a village near Kiev, Slobodenuyk said: it provided a bunch of homes with prototype mining boilers. People got free heat without even thinking about bitcoin, as all the work with crypto had been done for them.
After two years, the chips inside the boilers got old and mining stopped being profitable. When presented with the opportunity to keep the boilers but pay a little for electricity, people opted to switch back to wood stoves. Flashy new tech wasn’t compelling if it didn’t save them money.
Now, Hotmine is looking for partners to manufacture the electronics and metal boxes for its money-making heater. So far, it has offers from three potential partners in Russia.
Oles Slobodenyuk, CEO of Hotmine, with the mining boiler model
A pilot batch of 60 heaters is scheduled for release as soon as November to test demand, the company announced. Approximate price tag: $1,050. By the end of the year, Hotmine aims to sell 100 to 200 heaters.
Asked if he believes people would readily learn how to deal with bitcoin wallets and exchanges to spend their radiators’ earnings, Slobodenyuk said that at first, they won’t have to.
Hotmine can partner with crypto service providers, and all consumers would have to do is give a bank account number before harvesting their income converted to fiat.
Sooner or later people might want to go further down the rabbit hole and figure out bitcoin for themselves, Hotmine hopes.
Warming to bitcoin
Another believer that bitcoin-powered heating is ready for wide adoption, at least in places like Eastern Siberia, is Irkutsk resident Ilya Frolov.
His startup, Imagine8, makes heating systems in which miners manufactured by market leader Bitmain are immersed in mineral oil, which distributes their heat to the floor. To showcase the tech, Imagine8 plans to build and rent out guest homes that use it.
Frolov, who has been working on such systems since 2016, said he and a school friend brought on some two dozen people to use the mining heaters in their homes in the Irkutsk suburbs.
Initially, Frolov would ask homeowners to heat their homes with the system and send him their electricity bills. Some were fine with this option, but more people caught the bitcoin bug as they learned how it works, Frolov said:
“First, they were like, ‘I heard about bitcoin, that’s a pyramid [scheme], but I want free heating.’ Then, we worked with them, gradually converted them to our religion. And in the end, they were like, ‘Ok, I figured that out, I’m going to mine bitcoin myself.”
According to him, such customers paid for hardware and installation, then learned to handle wallets and exchange accounts and now are taking care of their bitcoin themselves.
Other companies use the same technology now, and some people would buy miners and oil reservoirs and construct the system themselves after watching videos posted by Frolov and his competitors, he said.
An average house as big as 100 square meters takes about 10 kilowatts to heat via an electric boiler, a popular option in Irkutsk. Electricity bills in the Irkutsk winters might cost a homeowner several hundred dollars a month. Instead, six or eight specializing mining chips, known as ASICs can heat a home like that and earn owners some bitcoin.
And the environment benefits, Frolov argued, when machines do double duty, “instead of having the heat from ASICs wasted in the air and people heating their houses with coal.”
The Food and Drug Administration (FDA) may incorporate blockchain to improve drug and medical products reviews and recalls.
In a speech at the Office of the National Coordinator for Health IT Third Interoperability Forum, on August 22, principal deputy commissioner Dr. Amy Abernethy, said the FDA is looking to modernize the way health care providers, drug manufacturers, and regulatory agencies communicate.
Without going into details, Abernethy said the agency plans to roll out uses of artificial intelligence, APIs and blockchain in this modernization effort. Improved interoperability – how the agency handles and shares information – may affect the reviewal process for new medicines.
“I want FDA to get our own technical house in order so that tech can ‘snap in’ – we can be agile and efficient. We need to be able to have common interfaces with industry so we can pass data between our organizations, have collaborative review, etc,” Abernethy said.
“Traceability back to source allows for the ability to crosscheck, workflow solutions,” she said. In that sense, the immutable ledger that blockchain provides may be used to guarantee data quality that comes from a number of sources.
Abernethy also alluded to a communication system where regulators are provided with real-time information and data. This speeds up the reviewal process, because FDA agents will be able to exchange messages contemporaneously with medical manufacturers.
Additionally, improved surveillance of medical products will assist in “determining when something should be recalled or a product label should be adjusted,” she said.
With improved data flows, Abernethy said medicine can become more targeted and patient-oriented.
Abernethy also serves as the acting chief information officer of FDA. She ended by saying the system will be rolled out in a “month or two.”
Bitcoin wallet and blockchain explorer provider Blockchain announced a partnership with the largest bitcoin processor, BitPay.
According to a blog post published today, Blockchain will integrate BitPay’s payment architecture into its wallet service. This partnership will allow Blockchain wallet users to pay merchants online or on mobile.
BitPay processes approximately $1 billion in bitcoin alone every year for businesses and individual clients and over $2.8 billion in other cryptos for institutional clients since 2011. The firm has built an ecosystem of merchants that accept their payments – including Amazon, Delta, and Hotels.com – because, as a payment processor, it offers the option to settle in fiat currencies and provides invoices.
Likewise, Blockchain is often regarded as one of the world’s largest wallet providers with approximately 38 million users, of which more than half are located outside the United States. Further, the firm’s wallet users account for roughly a quarter of all on-chain bitcoin transactions.
“We’re excited to see this new addition connect our Wallet users to the world of merchants that accept Bitcoin (and soon other cryptos) as a payment method — one of the key ways to interact with and grow the digital asset ecosystem,” Blockchain writes in a statement.
Blockchain’s wallet service is non-custodial and offers an optional know-your-customer (KYC) verification for users who want in-wallet trading capabilities. Whereas, BitPay requires its users to undergo KYC requirements.
In July, Blockchain unveiled its crypto exchange platform the PIT, with optionality to connect the firms wallets for nearly instant transfers.
Blocko, a South Korean blockchain firm working on enterprise applications of the tech, says it’s raised 9 billion Korean won (around $7.44 million) in an Series B+ round.
According an announcement on Thursday, Blocko said Korea’s oldest bank, Shinhan, as well as KEB Hana Bank, LB Investment and Dadam Investment took part in the round. The investment brings the firm’s total funding to date to over $20 million, according to CoinDesk Korea.
Blocko is working to build business-focused blockchain services, and has been working in conjunction with several national institutions such as the nation’s stock exchange, the Bank of Korea, Hyundai and the Korea Electronics and Telecommunications Research Institute.
In May, the firm launched a blockchain platform dubbed Aergo Enterprise, aiming to address the “growing need for data sharing between industries and companies in areas such as identity verification, document management, and the Internet of Things,” the firm told told CoinDesk Korea at the time.
Aergo Enterprise has since been deployed by more than 10 companies and institutions at home and abroad.
In the latest update, Blocko CEO Won-beom Kim said that aside from its enterprise work, the firm aims to “showcase various blockchain-based solutions that can be used in areas that have been difficult to implement, such as smart grids and dark data.”
Venezuela’s largest department store will install blockchain-enabled cash registers in its 49 retail outlets.
The megastore operator Traki announced August 22, it will integrate Singapore-based Pundi X’s point-of-sale device, XPOS, to offer a cryptocurrency payment rail for shoppers.
Already available in 30 countries, Pundi aims to sell 100,000 XPOS devices by 2021. This is part of the firm’s plan to introduce cryptocurrencies for everyday use, through an ecosystem of financial products like its XPASS crypto debit cards and Xwallet.
“We made the XPOS with the mission of creating real-life use cases for blockchain technology, and this couldn’t be better represented than Traki shoppers paying for their daily needs with cryptocurrency,” said Pundi X CEO, Zac Cheah.
Cheah continued to say that Traki has been an early adopter of blockchain technology in Venezuela.
“At Traki, we aspire to offer the most convenient options for our customers, and cryptocurrency has proven to be an effective payment solution,” said Michael Gomez, Chief of Crypto Assets department of Traki. Of Pundi’s near-300,000 wallet users, approximately one-tenth are based in Venezuela.
A period of hyperinflation and lack of liquidity has seen many Venezuelans adopt cryptocurrency as a store of value and payment option. Last year, President Nicolas Marduro launched the petro dollar cryptocurrency, pegged to the South American nation’s vast oil reserves, as a means to sidestep economic sanctions. Maduro recently ordered banks and state-owned companies to use the token.
Ethereum could become the first public blockchain on Hyperledger – if the open-source consortium’s technical steering committee approves a proposal to adopt the ConsenSys-backed Pantheon project.
Pantheon is a suite of ethereum-based services built by PegaSys, a 50-strong engineering team at ConsenSys. The Pantheon ethereum client, built on Java, is used to develop enterprise applications with features like privacy and permissioning.
The proposal was sent out in a Hyperledger mailing list email on Aug. 8, and if it is accepted, Pantheon will be renamed Hyperledger Besu (a Japanese term for base or foundation).
The approval would bring Pantheon’s protocol under Hyperledger, joining blockchain projects like Hyperledger Fabric by IBM and Hyperledger Sawtooth by Intel.
Notably, however, Pantheon would become the first public blockchain project added to the Hyperledger umbrella, meaning the Pantheon code would be published on Hyperledger’s proprietary GitHub page and open to contribution from developers already involved in the project.
Patheon runs on the Ethereum public network, private networks and test networks such as Rinkeby, Ropsten and Görli.
The new proposal comes as Hyperledger enterprise blockchain competitor R3 announced last month that it was on a hiring spree, expanding its London office and opening a second engineering hub.
Cryptocurrency exchange Gemini announced Wednesday that it is officially opening its doors to customers in Australia.
The exchange’s fifth international move, the development means that Australian users can buy and sell five cryptocurrencies on Gemini including bitcoin, bitcoin cash, ethereum, litecoin, and zcash. The startup, founded by investors Tyler and Cameron Winklevoss, is also making available its iOS and Android application to this market.
The U.S.-based Gemini also operates internationally in Canada, South Korea, Hong Kong, Singapore, and the UK.
Speaking on the launch, co-founder and CEO Tyler Winklevoss said Gemini is looking forward to building its “Crypto Needs Rules” brand to Australia:
“We are thrilled to continue expanding our global footprint and give Aussies a safe and trustworthy cryptocurrency experience. We founded Gemini to build trust in this nascent technology and we look forward to building that trust in Australia.”
Gemini made news earlier this week by adding cybersecurity expert David Damato to its executive team as chief security officer. Damato joins Gemini with 20 years of experience in cybersecurity.
As CoinDesk reported earlier this year, Gemini is looking to expand beyond the trade of cryptocurrencies as well. At the time, CoinDesk learned that Gemini would apply for a broker-dealer license from the Financial Industry Regulatory Authority, the organization that regulates the industry in the U.S.
A VC-backed blockchain firm that helped curate courses at Harvard, Oxford and Cambridge is officially rolling out its programs at three California universities.
MouseBelt‘s Blockchain Accelerator launched Wednesday at UC Davis, UC Los Angeles and UC Santa Barabara, boosting the educational presence at the noted U.S. schools. Backed by over $40 million in funding from New Value Capital, MouseBelt currently aids 65 student blockchain community groups at 14 universities worldwide.
The accelerator joins MouseBelt’s advisory team and media groups Bitcoin Radio and MouseBelt University.
Bundled into two programs, MouseBelt will sponsor undergraduate to PhD level programs. The first fund will cover research across all three campuses, specifically for blockchain project development. MouseBelt has set aside $500,000 in funding with up to five projects jockeying for $100,000 in seed funding.
MouseBelt is also donating to the three universities engineering departments. The accelerator is hoping to co-op the donations for the development of a general fundraiser toward university selected research capped at $500,000.
Speaking with CoinDesk, university outreach director Ashlie Meredith said the program is designed to fill a knowledge gap in the university level system. Most universities do not hold blockchain classes, leaving student organizations to fill the void.
A little over a year ago, these same student organizations became the basis for MouseBelt’s current initiative.
“We aim to help these universities become a driving force for innovation in the blockchain space, as well as provide students and researchers with the opportunity for both theoretical and industry experience.”
What’s in it for MouseBelt? Meredith says it’s not only about equity holds in successful projects, but a long term play on student development.
Blockchain courses in demand
UC Davis Dr Mo Shadoghi, who has been working with MouseBelt for the past year in various functions, says student demand for blockchain coursework is high. Shadoghi told CoinDesk his engineering blockchain classes max out at 65 students, forcing him to add a waitlist and cut students.
“What would it look like if a computation is democratic and decentralized?” Shadoghi asked in a conversation with CoinDesk. To him, blockchain technology is a paradigm shift in data storage and one requiring youthful creativity.
Running his own separate program at UC Davis, Shadoghi says undergraduates are currently forgotten in the space. Often, however, they hold the motivation and energy but merely lack the opportunity.
- Experts say Hamas is now using bitcoin for cross-border fundraising at an unprecedented rate. Still, even the largest estimates of terror financing in the region are apparently dwarfed by civilian bitcoin usage in the Gaza Strip, local experts tell CoinDesk.
- General awareness in Palestine of bitcoin and ethereum has increased since 2018.
- Freelance payments and remittances are reportedly the leading use-cases for bitcoin transactions in the Palestinian territories.
Terrorists aren’t the only Palestinians using bitcoin. Sources in Gaza told CoinDesk bitcoin is now more popular than ever among civilians, too.
“There are some offices that now do $5 million to $6 million a month,” freelance web developer and Gaza-based bitcoiner Ismael Al-Safadi told CoinDesk about local money changers. “I’ve seen an office send 100 BTC in one [transaction]. … There are also a lot of small clients. They send $200 or $1,000.”
The $5 million figure dwarves the “tens of thousands of dollars” in illicit transactions reported earlier this week by the New York Times.
Last year, CoinDesk reported that one such cryptocurrency dealer served roughly 50 clients a month purchasing or liquidating an average of $500 each. He has since relocated to Europe, having earned enough to emigrate.
Yet two sources with knowledge of the matter estimated there are up to 20 bitcoin dealers now operating in Gaza. Since PayPal and other online services exclude the Palestinian territories, this is one of the only ways for freelancers to easily receive international payments.
For example, Al-Safadi takes more than 70 percent of his monthly earnings in bitcoin. Based on the social media groups he participates in, Al-Safadi estimates there are around 10,000 occasional bitcoin users in Gaza. Indeed, an anonymous source in Gaza who taught seminars about cryptocurrency to roughly 300 Palestinians since 2017, told CoinDesk just one such Facebook group focused on bitcoin has 5,000 members.
The teacher said there is a nascent interest in ethereum applications among Palestinians as well, both at home and abroad. Sameh Sadaqa, a Palestinian in the United Arab Emirates developing an ethereum-based charity platform called Takatuf, told CoinDesk his first pilots will distribute crypto donations to schools in both Gaza and the West Bank. A test experiment began last week.
Sadaqa told CoinDesk:
“People there [in Palestine] are starting to learn and ask about it. … Palestinians are more using bitcoin [than ether] … to make international transfers and to bypass Israeli control.”
It’s hard to say what the local transaction volume truly is, since the Palestinian crypto ecosystem doesn’t connect directly to banks or global crypto exchanges. Instead, much like the Iranian community in 2018, it is dominated by peer-to-peer transactions, private social media groups and unofficial dealers.
All Gazan sources agreed: most local bitcoin users are cashing out in fiat, not holding or using it for secondary business transactions.
Yet, perhaps as an unintended consequence, the teacher said that Hamas’s ongoing fundraising campaign to gather bitcoin donations from abroad for its military wing, the Qassam Brigades, has actually boosted awareness among the civilian population.
“Everybody was talking about ‘what is bitcoin’ then,” the teacher said about news in February, when blockchain analytics firms identified a Coinbase account participating in a campaign that garnered $4,000.
Part cypherpunk black market, part terror-driven police state, the Gaza Strip since 2018 has generated a truly unique bitcoin ecosystem.
On one hand, entrepreneurs are using bitcoin in slowly growing numbers thanks to the high demand for mobile financial services. According to recent data from the Palestinian Monetary Authority presented in July at a fintech workshop in the West Bank city of Rawabi, 77 percent of adults in the Palestinian territories are unbanked even though 2.6 million Palestinians have smartphones.
Al-Safadi, the Gaza-based developer, told CoinDesk that Qassam Brigades operations are “secret” and not publicly related to the civilian bitcoin ecosystem. However, bitcoin dealers are now required to record the wallet address, amount and full name and ID number of every client for each liquidation for police records.
“Gaza works like a black market,” he said, adding he doesn’t know what the police do with this “surveillance” information.
Meanwhile, Hamas’s Qassam Brigades have stepped up their bitcoin fundraising strategy this past summer. According to the New York Times, the Qassam Brigade website now features a bitcoin tutorial and a wallet address generator to create a fresh account for each donation.
An anonymous source with knowledge of the matter told CoinDesk these donations have exceeded $12,000 so far this year. Another anonymous anti-money-laundering expert with knowledge of Hamas operations estimated the terror group’s bitcoin mining brought in $195,000 worth of crypto this year.
Such activities related to bitcoin are generally deemed noncompliant by local banks, as there’s still a longstanding rift between Palestinian political factions in different territories. A spokeswoman for the Bank of Palestine, which operates in both the Hamas-governed Gaza Strip and the Fatah-governed West Bank, told CoinDesk that the Palestinian Monetary Authority forbids institutional bitcoin transactions.
“We are not allowed, as banks, to trade with [bitcoin] or use it under any circumstances,” the Bank of Palestine spokeswoman said.
Even with all these factors considered, most Palestinian sources estimate the aforementioned civilian usage far outweighs bitcoin-related terror activity in the region.
Most Palestinian bitcoin users are accepting bitcoin payments for freelance work, or remittances from family abroad, and cashing it out through local peer-to-peer groups. The UAE-based Sadaqa said that, in an attempt to curtail terror financing, Israeli and American authorities sometimes interfere with bank transfers.
Indeed, in 2006 after Hamas rose to power, cash transfers to Gaza were temporarily halted across the board.
“The crypto market is promising in Palestine and has a good opportunity to grow there,” Sadaqa added.
Both Al-Safadi and the local seminar teacher said they hope global exchanges and official banks will eventually allow Palestinians to transact with bitcoin through compliant digital platforms.
“Bitcoin has a unique potential, but it’s not a big potential. There are still many steps to be taken,” the teacher said, adding:
“In Germany, you have places to go to exchange bitcoin easily without extra fees and hustles … something like this has to be here in Gaza. If it stays between some IT guys and money exchangers that are willing to take risks, it stays like this.”
INX Limited, a crypto exchange startup, plans to raise up to $129.5 million through an IPO, in the first security token sale registered with the U.S. Securities and Exchange Commission (SEC).
No, that’s not a typo for “ICO,” the initial coin offerings that tested the limits of securities law during the go-go days of 2017. IPO means IPO here: INX, which is domiciled in Gibraltar, filed a draft F-1 (the SEC’s prospectus form for foreign issuers) with the agency on Monday and will market the tokens to retail and institutional investors through the initial public offering.
As such, it’s a major milestone since to date, token sales have been unregistered. Some issuers confined their marketing to wealthy investors so they’d be exempt from the registration requirement and filed notices with the SEC. Most didn’t even bother to tell the regulators what they were up to, and over the last year, the agency has brought a slew of cases against ICO teams for illegally selling unregistered securities.
Further, INX’s sale would also be one of the very few full-fledged IPOs in the blockchain industry and almost certainly the largest. Last year, mining subscription company Argo Mining raised $32.5 million through an IPO on the London Stock Exchange.
INX’s target userbase is largely institutional investors, even though like the INX token itself, crypto trading on the exchange will be available to the general public, provided they go through anti-money-laundering and know-your-customer screening.
“When fully operational, we expect to offer professional traders and institutional investors trading platforms with established practices common in other regulated financial services markets, such as customary trading, clearing, and settlement procedures, regulatory compliance, capital and liquidity reserves and operational transparency,” says the draft prospectus.
In this way, INX will be competing with a number of institutionally-focused, regulated trading platforms launching this year – although INX stands out in the breadth of digital assets it plans to list.
“Our vision is to establish two trading platforms and a security token that provide regulatory clarity to the blockchain asset industry. We plan to achieve this [in part] by differentiating between security and non-security blockchain asset classes and providing trading opportunities for each class,” says the prospectus, later adding:
“In the future, we intend to establish a platform for the trading of derivatives such as futures, options and swaps.”
This means the exchange will be in the same space as not only Overstock’s tZERO (security tokens) but also Coinbase Prime and Fidelity Digital Assets (spot cryptocurrencies) – and eventually Intercontinental Exchange’s Bakkt (derivatives).
Although it is a security, INX’s token could also be described as a utility token, since holders will have the option of using it on the INX Exchange to pay transaction fees.
This is perhaps ironic since, during the ICO boom, many issuers argued that their tokens were not securities because they had a utility, such as the right to use a platform developed with proceeds from the sale.
At the same time, token investors will get a share of INX’s profits, though they won’t be equity holders.
Rather, they will stand in line ahead of shareholders to get repaid, in the event of a liquidation. In this way, the token is akin to preferred stock.
“It is the Company’s intention that the INX Token holders’ claim for breach of contract will be senior to the rights of the holders of the ordinary shares of the Company in liquidation,” the document says.
The securities will be represented as ERC-20 tokens on the ethereum blockchain.
Since crypto assets are such a new and unprecedented phenomenon that does not map easily to old categories, several different regulatory agencies have claimed jurisdiction over different parts of the industry.
For INX, this has meant getting sign-off from multiple agencies. Before it can proceed with the token sale, INX still has to get the SEC to deem its prospectus “effective.”
The prospectus includes disclosures that are standard for publicly listed companies, but rare if not unheard-of in the shadowy world of crypto, such as the executives’ employment contracts.
That’s just for the fundraising. For the exchange to actually open for trading, several other approvals still must be obtained.
Since INX will be listing security tokens, it will have to first become a broker-dealer, which requires a separate registration with the SEC and acceptance into FINRA, a self-regulatory organization (SRO), and an alternative trading system (ATS), which requires filing additional forms with the SEC.
On top of securities-related approvals, to operate as a crypto exchange where investors can buy and sell bitcoin and the like, INX will need money transmitter licenses from the individual states where it does business.
INX’s management, board, advisors and early investors feature luminaries from both the crypto and traditional finance worlds.
On the crypto side, INX’s advisors include bitcoin security stalwart Jameson Lopp, Blockstream chief strategy officer Samson Mow, and Morgan Creek Capital Management CEO Mark Yusko.
The management team includes executive managing director of U.S. operations Alan Silbert, a former commercial banker who ran an early bitcoin startup called Bitpremier on the side. (His brother Barry is the founder of VC firm Digital Currency Group, which is not involved in INX).
The board, on the other hand, includes David Weild, a former vice-chairman of Nasdaq, and Thomas K. Lewis, former CEO of the predecessor company to TD Ameritrade.
Investors include Mow and litecoin creator Charlie Lee, according to the draft prospectus.
Deloitte, one of the “Big Four” professional services firms, has officially launched a plug-and-play product aimed to help enterprises showcase their blockchain solutions to clients.
The firm’s new “Blockchain in a Box” (BIAB) is designed as a mobile unit packed with four built-in nodes and several monitors that can be linked to external services such as cloud-based systems.
Firms wanting to demo their blockchain solutions can simply plug in SD media cards and load up their products into the system. Deloitte says BIAB “facilitates rapid selection and exchange of demo solutions tailored to specific client needs.”
Linda Pawczuk, principal at Deloitte Consulting and U.S. blockchain lead, explained in an announcementon Monday:
“Deloitte custom built this solution based on client interest in understanding blockchain capabilities in live interactions. What’s often misunderstood about blockchain is that it is an entirety of a technology solution – when in reality, it’s a technology component that enables larger business applications and approaches. Our mobile demonstration is practical, tactical and most importantly, tangible to clients.”
Deloitte said the product has already been demoed to “several” clients and more widely at conferences, including CoinDesk’s Consensus 2019.
Chih-Wei Yi, principal at Deloitte & Touche, commented that BIAB “helps to demystify blockchain and is a refreshing and well-grounded approach versus traditional slideware-based demonstrations.”
The World Bank has issued a second round of its landmark blockchain bonds.
The international financial institution raised another $50 million AUD ($33.8 million U.S.) by selling the “blockchain-operated debt instrument” (bond-i), according to Commonwealth Bank of Australia (CommBank), which managed the sale jointly with RBC Capital Markets and TD Securities.
Both new and existing investors participated, CommBank said.
All told, the World Bank has issued $160 million AUD ($108 million U.S.) of these bonds, which run on a private version of the ethereum blockchain. It is “the first bond created, allocated, transferred and managed through its life-cycle using distributed ledger technology,” according to CommBank.
“We are happy to see the continued, strong support and collaboration from investors and partners,” Andrea Dore, the World Bank’s head of funding, said in a press release. “The World Bank’s innovation and experience in the capital markets is key to working with our member countries to increase digitization to boost productivity in their economies and accelerate progress towards the Sustainable Development Goals.”
The blockchain platform was built and developed by CommBank’s Blockchain Centre of Excellence.
“CBA now has tangible evidence from our first bond offering using blockchain technology and subsequent bond management, secondary trading and tap issue via the same platform, that blockchain technology can deliver a new level of efficiency, transparency and risk management capability versus the existing market infrastructure,” Sophie Gilder, head of blockhain and AI at CommBank, said in last week’s release, adding:
“Next we intend to deliver additional functionality to deliver greater efficiencies in settlement, custody and regulatory compliance.”
A year ago, the World Bank announced the first $110 million AUD (roughly $81 million U.S. at the time) issuance of bond-i.
In May of this year, the World Bank and CommBank began to record secondary market bond trading using blockchain tech.
Spanish megabank Santander Group is expanding its use of Ripple’s technology.
The bank is building a “payment corridor” that would let customers in Latin America send money to the U.S. instantly for free via One Pay FX, a mobile app that uses Ripple’s xCurrent software, officials told CoinDesk.
Currently, only customers in the U.K. and Spain can send money to the U.S. over One Pay FX. While the bank would not reveal how many Latin American countries it plans to connect to the corridor, Santander serves Brazil, Uruguay, Chile and Mexico.
Like Santander’s DLT efforts to date, the new payment capability will not involve XRP, the cryptocurrency that Ripple periodically sells to fund operations and that powers its separate xRapid product. Last year, Santander introduced One Pay FX in four countries that account for more than half the bank’s profits: Spain, the U.K., Brazil and Poland.
This offering is getting traction, the bank says.
“Customers who were not doing international transfers are now using the service, customers who were using international transfer are now doing it more, and customers who had gone to use fintech competition have come back because of the One Pay offering,” Cedric Menager, CEO of One Pay FX, told CoinDesk.
Unlike the SWIFT messaging system that banks traditionally have used to make international transfers, xCurrent is instant, has no fees and gives users a view into currency exchange rates before they send money, Menager said.
While Santander would not reveal its transaction volumes for One Pay FX, it said those volumes tripled from January 2019 to June and volumes for Spain increased by 120 percent year-over-year in April.
Expanding One Pay FX will mean a bigger change for some Latin American customers, who will go from making international transfers in branches to instant online payments, than for European customers, said Menager.
“The international payment experience in the Latin American markets is even less evolved than in the European markets,” he said. “There are even parts of the Latin American market where it’s almost impossible to do an online international payment.”
The corridor will be launched country-by-country, and the bank would not say when the first country would launch.
The bank also plans to bring One Pay FX to U.S. Santander customers for them to send money abroad but does not have a date for that launch yet. The U.S. launch will be a heavier lift for the bank because of the difference in financial regulations.
Santander is also developing Pago FX, which will be an xCurrent international payment product for non-Santander customers, in an attempt to win over these customers from other banks.
“International payments is a way for us to acquire customers having a painful experience with traditional banking,” Manger said.
Cryptocurrency exchange Binance has announced that it’s launching a project that will develop cryptocurrencies and digital assets pegged to fiat currencies around the world.
Dubbed Venus, the “localized” stablecoin initiative will see the firm utilize its existing infrastructure, such as its public blockchain, Binance Chain, and international payment system, “to empower developed and developing countries to spur new currencies.”
Binance said it’s seeking to create new partnerships with governments, enterprises and cryptocurrency and blockchain firms to assist the effort.
The exchange stated in its Monday announcement that it “will provide full-process technical support, compliance risk control system and multi-dimensional cooperation network to build Venus,” adding:
“Binance welcomes additional government partners, companies and organizations with a strong interest and influence on a global scale to collaborate with us to build a new open alliance and sustainable community.”
The exchange has previously launched two stablecoins, BTCB, pegged to bitcoin, and BGBP, pegged to the British pound. on Binance Chain. It also listed the USDC dollar-backed cryptocurrency back in November.
In a statement to CoinDesk, Binance co-founder Yi He addressed the new project, saying:
“We believe that in the near and long term, stablecoins will progressively replace traditional fiat currencies in countries around the world, and bring a new and balanced standard of the digital economy. We hope to achieve a vision, that is, to reshape the world financial system, allow countries to have more tangible financial services and infrastructures, protect their financial security and increase the economic efficiency of countries.”
- Bitcoin has risen by $1,000 since Friday’s announcement by Bakkt exchange that it will be launching physically-settled bitcoin futures on Sept. 23. The price rise has neutralized the bearish setup on the intraday charts seen last week.
- The gains could be extended further to $11,000, as the hourly chart is reporting a bullish continuation pattern.
- The weekly chart continues to call a deeper pullback to $9,000 with key moving averages (MAs) producing a first bearish crossover since February.
- A weekly close above $12,000 is needed for a complete bullish revival.
Bitcoin (BTC) has gained $1,000 since the Bakkt exchange announced it has the green light to offer bitcoin futures, but key resistance still lies ahead.
The top cryptocurrency picked up a bid around $9,700 in the U.S. trading hours on Friday and printed highs above $10,750 earlier today, according to Bitstamp data.
Notably, the move above $10,000 happened on Friday after CoinDesk reported that the Intercontinental Exchange’s young subsidiary Bakkt has received regulatory approval to launch its much-anticipated platform for daily and monthly BTC futures.
Bitcoin futures to be launched by Bakkt will be physically settled, as opposed to the cash-settled futures listed on the Chicago Mercantile Exchange.
Put simply, BTC futures trading on Bakkt will not rely upon unregulated spot markets for settlement prices and the party will receive delivery of bitcoins from the Bakkt Digital Asset Warehouse at the end of the contract period.
Many observers, including cryptocurrency analyst and trader Scott Melker, are of the opinion that Bakkt’s physically-delivered futures product will open the floodgates for the institutional money and is a long-term bullish development for bitcoin.
Physically delivered futures require the actual purchase of bitcoins, which, according to Melker is a “huge” development. Also, there is general consensus that the price discovery in new physical delivery markets will contribute to building confidence in BTC prices.
That said, some observers are warning that an increased institutional volume my not necessarily translate into stronger buying pressure.
“Volume is volume, don’t express your bias toward it”, popular Cryptocurrency market analyst @CryptoNekoZ tweeted earlier today.
Meanwhile, financial analyst and tech journalist Joseph Young tweeted over the weekend that, “Bakkt launch was priced into the market”.
So far, the markets have reacted positively to Bakkt news if the $1,000 price rise is anything to go by.
The cryptocurrency is currently trading at $10,700 on Bitstamp and could rise further to $11,000. The gains, however, could be short-lived as the odds are stacked against the bulls, according to technical charts.
BTC witnessed a high-volume ascending triangle breakout earlier today. The bullish continuation pattern indicates a resumption of the rally from the last week’s low of $9,467 and has created room for a rise to $11,000.
So far, however, the upside has been capped around $10,750.
BTC fell 10.49 percent last week, strengthening the case for a deeper pullback put forward by the preceding week’s rejection above $12,000.
The 14-week relative strength index has created a bearish lower high. Further, the 5-week moving average (MA) has crossed below the 10-week MA for the first time since February.
Currently, the 5-week MA is seen at $10,610 and the 10-week MA is located at $10,691. The bearish crossover indicates the path of least resistance is to the downside.
The moving average convergence divergence histogram continues to produce lower highs above the zero line, a sign of weakening bullish momentum.
All-in-all, the case for a fall back to $9,000 remains intact. The outlook would turn bullish only if prices print a weekly close (Sunday, UTC) above $12,000.
Katherine Wu was up until 3 a.m. Wednesday annotating Kik’s response to its complaint from the U.S. Securities and Exchange Commission (SEC).
“That’s what I do for fun,” she told CoinDesk later that morning.
And now Wu is once again employed to dig deep, into startups.
Revealed exclusively to CoinDesk, Wu has been named a principal at Notation Capital, a venture capital firm that invests across the technology sector, including parts of the crypto industry.
Founded by Nicholas Chirls and Alex Lines, Brooklyn, N.Y.-based Notation invests based on its teams’ areas of interest, which has included several blockchain-related investments, such as Filecoin, Livepeer and Bison Trails, to name a few. Notation is also known for investing in the very early stages of a company or project.
In a draft blog post shared with CoinDesk in advance, the company writes:
“We weren’t hiring for this role – and then we met Katherine. For anyone that’s been fortunate enough to spend some time with K-Wu, it’s clear within minutes that she has a unique talent to bring people together, ask the right questions, and then get shit done in a way that is very much her own.”
Last month, the firm hired crypto mining veteran Thomas Bailey. Wu makes it a team of four.
Down the rabbit hole
A graduate of the Cardozo School of Law in New York, Wu discovered crypto while studying to be a securities attorney.
“I fell into crypto first and then fell in love with the tech world later, which I feel like is the opposite of most people,” Wu said. “When I first got into crypto was when SAFT was starting to become a thing and ICOs were starting to become a thing.”
The legal questions raised by those token sales interested her first, but then she became more interested in the technology. “It was simply the most intellectually challenging topic I’d ever come across,” Wu said. “You’re constantly being questioned on every assumption you make.”
She was a member of the founding team at Messari, where she served as director of business development before leaving the crypto data firm in March.
While Wu will not be exclusively crypto-focused at Notation, she does expect to help the company source some of those deals. She’s reluctant to identify specific areas of the industry she’s on the lookout for.
“Because of how quickly the landscape changes and how quickly your assumption changes, it’s sometimes hard to hold onto one cool idea at a time and look at it on a long term horizon,” Wu said, concluding:
“It’s definitely really exciting for me to be given this role to write checks and support businesses if I really feel strongly about that.”
A small bank in New York City has started doing business with cryptocurrency firms, joining the very short list of U.S. financial institutions to embrace the sector.
Quontic Bank opened a checking account for a bitcoin ATM company a few weeks ago and is in the process of completing a contract to deliver banking services to another crypto startup. The bank wouldn’t name either client.
“We’re just taking steps so that when the regulatory environment becomes more crypto-friendly, we don’t have a lot of catching up to do,” said Quontic chief executive Steven Schnall, who acquired the bank in 2009. “We’re looking to diversify our product offering and our customer mix by entering into that field.”
While Schnall wouldn’t say how big he wants Quontic’s crypto business to be, he claimed the pending contract “could impact millions of Americans.”
Crypto-friendly banks are extremely rare, in part because of the extra work they have to do complying with know-your-customer (KYC) and anti-money laundering (AML) regulations.
“Banks and other financial institutions have to look out for any suspicious activity,” said Joshua Klayman, head of the blockchain and digital assets practice at law firm Linklaters. “If you have a startup that raised money doing an ICO and didn’t do proper KYC or AML, that bank doesn’t know who the proceeds are from.”
Like those institutions, Quontic is a relative pipsqueak in the banking industry. With $420 million in assets, it is only 0.015 percent the size of JPMorgan.
Yet Quontic stands out because its leaders caught the crypto bug early on.
Students of crypto
Schnall, a longtime mortgage lender, became interested in bitcoin when it was worth less than $1, bought his first bitcoin at $75 in 2013 and lost 500 BTC in the Mt Gox debacle.
Patrick Sells, now the bank’s chief innovation officer, said Schnall began to educate him on bitcoin the first few times they met, while Sells was doing mortgage lead generation for Quontic through his own firm.
To learn more about the mechanics of cryptocurrency, Schnall and Sells built an ethereum mining operation, independent from Quontic, in January 2018. (Schnall said he is now more bullish on bitcoin than any other cryptocurrency.)
The two executives even came close to launching their own cryptocurrency, also separate from the bank, called QCoin. They lined up $2.5 million for an initial coin offering (ICO) but called it off after the market crashed.
Undeterred by the ups and downs, the bankers said that they believe banking and crypto can have a symbiotic relationship and are exploring what steps toward that goal might look like under the U.S. regulatory framework.
The bankers helped educate their staff of 180 by giving them each $20 in bitcoin when the price of bitcoin was around $3,000, and they’re looking to hire employees with experience in cryptocurrency.
“We can teach them the banking side,” said Sells, vaping in a white v-neck and jeans at Quontic’s Manhattan headquarters. “It’s easier to do that than vice versa.”
While the bank wants to let cryptocurrency companies know that it’s open to banking them, Quontic said it has high standards for crypto customers.
When the bitcoin ATM network approached Quontic a year ago, the company was not prepared for the bank’s compliance vetting.
It didn’t have a disaster recovery plan, it was not properly tracking the currency transaction reports (CTRs) filed to regulators, and the company’s reporting was not up to Quontic’s standards.
After working closely with the bank for a year, the company opened an account at Quontic a few weeks ago.
To Schnall, such professionalism is necessary for crypto startups to be taken seriously.
“You don’t have mom-and-pop financial institutions. You’re not going to have mom-and-pop crypto players of any significance,” Schnall said. “Crypto companies have to have strong controls, internal audit, and a very robust system of compliance.”
Additionally, the juice has to be worth the squeeze for Quontic to bank a crypto firm.
“There must also be a strong strategic motivation for us as well – such as meaningful deposit balances, etc.” Schnall said. “‘Meaningful’ is relative to how complex, risk-laden and labor-intensive the account will be.”
Blockstream has launched a colocation mining service and already counts the Fidelity Center for Applied Technology and LinkedIn founder Reid Hoffman as customers.
On Thursday, the bitcoin and blockchain technology firm announced a new mining wing, Blockstream Mining, along with a BetterHash-based mining pool, Blockstream Pool. Led by cryptographer Dr. Adam Back, Blockstream is best known for its bitcoin-sidechain ecosystem, the Liquid Network.
Blockstream Mining will host colocation services across North America with its most recent installation in Georgia. The announcement stated that 300 megawatts, or 300,000 kilowatt-hours of energy, will be made available to customers.
That level of energy supply would be able to power up around 100,000 more-advanced ASIC mining models such as MicroBT’s WhatsMiner M20S or Bitmain’s AntMiner S17 Pro.
These machines on average have an electricity consumption of about 3 kWh per unit with a hashing power of around 55 terahashes per second. That could add about six exhashes per second to bitcoin network’s computing power (1 exhash = 1 million terahash).
Blockstream says its self-mining efforts currently make up one percent of the global bitcoin hash rate. The future relationship between Blockstream’s self-mining and Blockstream Mining was not specified.
Blockstream CSO Samson Mow says the firm’s mining efforts, even before the latest launch, were largely based on concerns about the network’s future:
“We began self-mining back in 2017 after being motivated by widespread concern that mining decentralization was declining. At the time it appeared that parties involved in ASIC manufacture, hosting, and pool operations were becoming a centralizing force and holding back Bitcoin from reaching its full potential. We figured we could use our Bitcoin expertise to improve the situation.”
In this vein, Blockstream also announced the launch of Blockstream Pool running the BetterHash mining protocol. Introduced in 2014 by Blocskstream project OpenHash, BetterHash decentralizes mining pool decisions, such as which block to mine, to individual owners. Proponents argue it further decentralizes and democratizes bitcoin mining.
Blockstream Pool is the graduate of a one-year testnet and is available to Blockstream Mining customers. As of now, Blockstream Mining is exclusive to enterprises and institutions.
The European Central Bank (ECB) has issued a new report indicating that it plans to use more on-chain data to better monitor the crypto markets.
Titled “Understanding the crypto-asset phenomenon, its risks and measurement issues,” the reportreveals that the ECB has already built a system that uses “high-quality” aggregated data available online in its efforts to analyse “the crypto-asset phenomenon” to identify and monitor how the financial technology might affect monetary policy and the risks it potentially poses to market infrastructures, payments and financial stability.
However, using available data in this way has limits to its value. The report explains that this data leaves “gaps and challenges,” such as the exposure of financial institutions to crypto-assets and payment services that use layered protocols.
It lists, among others, derivatives and investment vehicles’ exposure to digital assets, financial firms moving into custody and other services, and payments platforms using cryptos as potentially having implications for financial policy and stability.
While currently “contained and/or manageable,” such links with regulated financial firms “may develop and increase over time.”
Going into more detail on these issues of collecting accurate data, the EU banking authority says:
“Specifically, it is hard to retrieve public data on segments of the crypto-asset market that remain off the radar of public authorities; some relatively illiquid trading platforms may be affected by wash trading; and there is no consistency in the methodology and conventions used by institutionalised exchanges and commercial data providers. Moreover, new and unexpected data needs may well arise with further advancements in crypto-assets and related innovation.”
Going forward, the ECB plans to go into more granular detail for its analyses of crypto assets, and “will continue to work on indicators and data by dealing with the complexity and growing challenges encountered in analysing on-chain and layered protocol transactions.”
It will further seek new data sources for information on links between crypto assets and regulated firms.
Regarding off-chain transactions – transactions conducted off the blockchain and later aggregated back on-chain in fewer transactions – the ECB said it will work on increasing the “availability and transparency” of reported data and the methods used to provide it, “harmonising and enriching the metadata and developing best practices for indicators on crypto-assets.”
Arrington XRP Capital-backed financial startup Nexo has unveiled a crypto card with a line of credit backed by the user’s crypto holdings.
Nexo partnered with an unnamed intermediary to issue the card, which offers a way for users to “spend the value of their crypto without actually spending it,” said firm partner Antoni Trenchev.
Unlike other crypto credit cards like TenX and Crypterium that convert cryptocurrencies to fiat for every transaction, Nexo collateralizes users’ crypto and supplies them with a fiat loan. Since its founding, the startup has extended more than $700 million in crypto-collateralized loans to over 200,000 clients. Now, the loans can be used to make purchases at merchants that accept MasterCard, through a co-branding.
After swiping, an oracle confirms the user has enough collateral to cover the purchase, instantaneously executes a loan, and settles the transaction in fiat. Trenchev claims the card’s issuer is licensed within the European Economic Area.
Through additional partnerships with intermediaries, Nexo aims to expand to the U.S. and Asia by the end of the year.
The cards are available independent of a client’s credit history, as the staked collateral reduces default risk. Likewise, interest rates are set between 8 and 24 percent APR based on the loan structure and local regulations.
Users can repay their loans in either crypto or fiat, though using Nexo’s token will reduce interest rates to 8 percent. Additionally, minimum payments will be eliminated if the value of bitcoin increases. This is because the credit line is “dynamic,” meaning as the value a client’s collateralized assets increases relative to the market, their fiat debts decrease.
In fact, crypto entrepreneur Brock Pierce mortgaged a house in Amsterdam through a $1.2 million line of credit through Nexo, and hasn’t made a single repayment due to the rising value of bitcoin since he took the loan, Trenchev said.
Conversely, if cryptocurrencies crash, users will either have to “deposit more crypto, pay a part of their loan to reduce exposure, or sell a portion of their collateral to restore the loan-to-value ratio,” Trenchev said.
The company complies with know-your-customer ustomer protocol, follows international sanctions, and has integrated with blockchain investigators Chainalysis to check if collateralized crypto has been ill-gotten, it says.
Nexo has previously paid out dividends of 30 percent on $3 million of profit made during its first 7 months in operation to token holders.
Bitcoin.com has announced it will launch a crypto exchange called Exchange.Bitcoin.com.
Price of BCH last 30 days via CoinDesk data.
This is the latest addition to a suite of products Bitcoin.com provides beyond their news service. The company has also developed a crypto casino, a wallet, and a P2P bitcoin cashexchange, aimed at furthering the utility of the forked alternative to bitcoin.
“While our company thinks the bitcoin cash network will be adopted by the masses worldwide, we also think it’s important to promote free markets and choice,” the company said in a statement.
Expected to launch in early September, the exchange will list many of the largest capitalized coins including bitcoin, ethereum, and litecoin. Additionally, it plans to offer around 50 trading pairs, as well as Simple Ledger Protocol (SLP) tokens tied to the BCH blockchain.
Former CEO and proponent of bitcoin cash Roger Ver said:
“We’re on the cusp of something very exciting with SLP tokens — It’s the beginning of a world where we can tokenize anything and, as people realize the potential this holds, they’re going to start demanding a place to trade their tokens.”
The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission has revealed plans to bring cryptocurrency exchanges under its direct regulation.
On August 7, Business Korea reported on the FIU’s decision to shift away from its current practice of regulating crypto exchanges indirectly by providing administrative guidance to domestic banks.
A shift away from indirect regulation
In order to bring crypto exchanges into the country’s regulatory system, an FIU official revealed on Aug. 6 that the South Korean government will introduce a crypto exchange licensing system, as recommended by the Financial Action Task Force (FATF). This will reportedly enhance the transparency of cryptocurrency transactions.
At a public hearing held at the National Assembly Member’s Office in Seoul, Lee Tae-hoon — who serves as head of administration and planning at the FIU — stated:
“If an amendment to the Act on Reporting and Use of Certain Financial Transaction Information, which reflects the FATF’s international standards for cryptocurrencies, passes the National Assembly, it will be possible to prevent money laundering through cryptocurrencies.”
Lee added that should lawmakers approve the decision to shift away from “indirect regulation through commercial banks to direct regulation,” oversight of the sector would be more effective.
Commentators reportedly noted that regulatory amendments would need to integrate existing stipulations, which hold that banks must issue real-name accounts to crypto exchanges. This would ensure that crypto exchanges adhere to the same know-your-customer and anti-money-laundering standards as traditional financial institutions.
Impact of FATF guidance
This week’s news aligns with recent unofficial reports that four South Korean crypto exchanges were facing stricter regulation as they attempted to renew their banking accounts.
The tightened requirements were reportedly imposed in the wake of the FATF’s new June 2019 guidance for strengthening control over crypto exchanges in order to better combat money laundering.
Amazon is looking to hire a software development engineer to develop an advertisement blockchain.
Amazon works on an advertising blockchain
Amazon posted a job offer on LinkedIn for a software development engineer for its Colorado team, who is supposed to work on an advertisement blockchain. The online retail behemoth aims to grow its advertisement business by leveraging its online retail data, industry-leading cloud services, and a fast-moving startup culture. The post declares:
“Our new team in Boulder, CO is looking for a Sr Software Engineer to work within our Advertising FinTech team focused on a Blockchain ledger, billing and reconciliation systems to provide data transparency on transnational financial data.”
An important role
The chosen engineer’s role will consist of requirements analysis, lead design, implementation and deployment of core components, interfacing with engineers and program managers. The position will also be responsible for the operational support and maintenance of the systems.
Furthermore, the engineer will also “have an opportunity to define the technical and architectural roadmap for the systems.” The company noted that it prefers candidates with experience in the advertisement, financial technology and blockchain.
As Cointelegraph reported in May, Amazon has been awarded a patent for generating Merkle trees as a solution to the Proof-of-Work algorithm. Still, the exact plans of the company remain unclear.
Public enterprise blockchain platform VeChain has partnered with Autralian winemaker Penfolds to release a case of blockchain-encrypted wine bottles for sale, as part of its Wine Traceability Platform (WTP) initiative.
More specifically, the launch of Penfolds Bin 407 in July marks the beginning of VeChain’s WTP phase 2, per a press release from VeChain on Aug. 6. The bottles from this case are reportedly available at the Waigaoqiao International Alcohol Exhibition & Trading Center, D.I.G.’s Flagship Store and the Sen Lan Shang Du in Pudong New District.
As per the press release, each bottle inside Bin 407 comes attached with an encrypted NFC chip. This chip reportedly contains the bottle’s product information on a blockchain, which can be accessed with a chip reader. These details reportedly include the bottle’s provenance information, which is verified by third-party auditors.
Blockchain for wine
A number of companies are beginning to issue blockchain verification systems for wine. As previously reported by Cointelegraph, the big four audit firm Ernst & Young announced that it’s Ethereum-based blockchain solution will be used to verify the authenticity of imported European wines in Asia. This solution would reportedly be implemented on the e-commerce platform Tattoo, for use by Blockchain Wine Pte. Ltd.
Near the end of July, the Chinese alcohol wholesaler and marketer also announced that it would be using a blockchain solution to verify its products. This solution purportedly makes use of proprietary anti-counterfeiting laser recognition for certification and blockchain technology for tracking.
On a slightly different note, retail giant Overstock announced its move into blockchain-based wine futures back in Oct. 2018. Overstock reportedly also intended to fight wine fraud, but in this case by means of developing a digital trading platform for wine futures. This would reportedly result in a secure supply chain that verifies wine industry products, they said.
Overstock founder and CEO Patrick M. Byrne commented on the company’s idea, saying:
“Like any economy, the wine industry has difficulty scaling its middlemen-heavy systems in parallel with the growing demands of an increasing global market. VinX’s steps in tokenizing wine futures while allowing wine enthusiasts to know without a doubt that the bottles they purchase are filled with authentic wines will position the entire industry as a model of a new global economy that replaces old boys’ networks with frictionless trust through technology.”
- Bitcoin could rise to $10,500 in the next 24 hours or so, as the 4-hour chart is looking more bullish.
- A break above $11,120 is needed to revive the short-term bullish outlook, though.
- Some expert believe the just-announced U.S. Fed interest rate cut could bode well for BTC in the long-run.
Bitcoin (BTC) has eked out moderate gains amid the U.S. Federal Reserve’s announcement of its first rate cut in over a decade.
The top cryptocurrency by market value is currently trading at $9,950 on Bitstamp, representing a 2 percent gain on a 24-hour basis.
The Federal Reserve (Fed) on Wednesday said it will lower interest rates by 0.25 percent to cushion the economy from a global slowdown and trade tensions. That was the first U.S. interest rate cut since the great financial crisis of 2008, and indeed since the creation of bitcoin in 2009.
BTC rose by over $200 to $10,000 in the three hours leading up to the Fed’s announcement at 18:00 UTC. More importantly, the cryptocurrency remained bid in the following hours and hit a high of $10,172, according to Bitstamp data.
The price action seems to have convinced investors that BTC picked up a bid due to Fed’s rate cut.
Boon for bitcoin?
Some observers believe rate cuts by the Fed bode well for BTC.
This is because an interest rate cut reduces the yield on a currency. Further, the liquidity added to the economy via rate cuts often leads to inflation and loss of purchasing power of the currency.
Put simply, falling interest rates mean fewer reasons to hold U.S. dollars, as pointed out by Alan Silbert, executive managing director at INX Trading Platform.
Silbert believes the Fed will deliver more rate cuts in the near future. The central bank, however, refrained from signaled further easing yesterday.
The Fed has cut rates less than 12 months away from bitcoin’s mining reward halving – a process aimed at curbing inflation by reducing reward for mining on the blockchain by 50 percent every four years.
Essentially, BTC’s monetary policy is on a preset path – its supply is halved every four years.
The monetary policy divergence would widen further if the Fed embarks on a full-blown easing cycle, as anticipated by Silbert. That would further strengthen bitcoin’s appeal as store of value and may bolster the bull market.
As for the next 24 hours, bitcoin looks set to test key average located at $10,500.
BTC rose above $10,000 yesterday, validating the seller exhaustion signaled by the long-tailed doji created on the 4-hour chart on July 28.
That bullish doji reversal indicates that the sell-off from recent highs above $13,000 has ended and the path of least resistance is to the higher side. The descending triangle breakout confirmed yesterday also indicates a bull reversal.
Notably, buying volumes picked up following the price breakout. The green volume bar created in the four hours to 16:00 UTC yesterday was the highest since July 19.
Hence, the cryptocurrency may rise toward $10,500 (50-day moving average) over the next day or two. However, the outlook as per the daily chart would turn bullish only if and when BTC invalidates the bearish lower-highs pattern with a move above $11,120.
The case for a rise to the 50-day MA in the next 24 hours would weaken if prices find acceptance below yesterday’s low of $9,574, although that looks unlikely.
Lightning-centric bitcoin wallets are gaining traction in 2019 and making small transactions affordable by reducing network fees.
The bootstrapped Spanish startup Bluewallet garnered 35,000 downloads so far this year, according to co-founder Nuno Coelho, a significant jump from the 5,000 users it had in 2018.
Coelho told CoinDesk the wallet’s built-in lightning marketplace, offering connections to external services like the crypto exchange ZigZag, the blog Yalls and games like Lightning Roulette, facilitates nearly 10,000 referrals a month. So far, BlueWallet users have completed more than 100,000 lightning transactions.
“The things we are working on now are to prepare the wallet for the next bull run,” Coelho said. “To allow users to have more control over the fees when the market will be with higher fees.”
After a year of operations, Bluewallet is currently raising its first round of venture capital. It is hardly alone. Competition across the marketplace is ramping up with a crop of new wallets seeking funding to support lightning development, sources told CoinDesk.
The price of bitcoin over the last 30 days via CoinDesk data.
In June, the Lightning Labs wallet launched and attracted 2,000 downloads within the first 24 hours. That same month, the bitcoin wallet provider Samourai Wallet announced a partnership with the French lightning node-maker Nodl to make the mobile wallet lightning-compatible.
At the same time, Zap wallet creator Jack Mallers told CoinDesk that 500 Android users downloaded Zap since early June. This summer could be described as a lightning boom for product development.
Plus, Mallers added, Zap now has more than 25,000 desktop downloads and 1,000 active TestFlight users on iOS.
“Not only are they downloading it, but the applications are actually checking assets because they’re using it and the wallets are open,” Mallers said. “On average, we get thousands of asset downloads a day. That means we have thousands of active users.”
According to Google’s analytics, Mallers said, only 33 percent of those users are located in the United States. While Bluewallet has far more American users, Coelho said his company’s wallet also appears to be gaining traction in Indonesia, the Philippines and Japan, based on App Store data and the times that users interact with the product.
Across the board, all of these apps share a common trait: They lack a clear business model.
However, for some, that process might be seen as a feature, not a bug.
“It’s not our main priority to focus on a business model at the moment,” Coelho said. “It’s our priority to … put product out there and talk to users.”
Like Coelho, Mallers said he is not in a rush to profit from this wallet because playing the long game means focusing on users for now. Lightning Labs developers told CoinDesk the startup will offer premium services for wallet users in the future, but collecting fees from users isn’t a priority for their team either.
“It wasn’t very clear how a lightning wallet would make money. A lightning wallet’s point is to help with scaling,” Mallers said.
Most mainstream wallets like Jaxx and Bread earn revenue by taking a percentage of transaction fees. They also rely on other revenue models like fundraising tokens (Bread) or integration partnerships (Jaxx). Meanwhile, open-source wallets like Bluewallet and Zap de-prioritize the business model as they seek to stabilize the product with the help of volunteer contributors.
“You cannot accelerate the development of bitcoin,” Coelho said. “We see this as a long-term project, from 5–10 years.”
So far, most of these wallet apps rely on an autopilot setting rather than making users manage channels and independent nodes. Coelho said those options for experts will come with time, considering that the LND beta version many such wallets are experimenting with is just one year old.
As such, Coelho concluded:
“Our goal was just to show this is what lightning could be in the future.”
Bitcoin futures platform Bakkt is gearing up to launch soon, the head of its parent firm said Thursday, although he did not set a firm timeline.
Intercontinental Exchange (ICE) CEO Jeffrey Sprecher, speaking during a quarterly earnings call, said Bakkt is “working to develop a regulated ecosystem that services the evolving needs of [participants] around the world,” adding:
“Subject to final regulatory approvals, we plan to launch our physically settled bitcoin futures in the very near future.”
Sprecher did not provide a specific timeline.
Bitcoin prices over the last seven days via CoinDesk data.
ICE first announced Bakkt in August, unveiling an ambitious plan to offer physically-settled bitcoin futures contracts and additional work with Microsoft, Starbucks and BCG Consulting.
While the company initially planned to launch the platform in December 2018, Bakkt was delayed a number of times, and does not currently have a firm launch date.
Bakkt initially intended to have the Commodity Futures Trading Commission (CFTC), which oversees derivative products in the U.S., approve its futures contracts, but ultimately self-certified.
The company is now waiting on a trust charter from the New York Department of Financial Services. Once NYDFS approves Bakkt’s warehouse, the company will be able to launch its new product.
The company is facing competition, however: TD Ameritrade-backed ErisX is also planning to launch physically-settled bitcoin futures contracts, and LedgerX announced Wednesday that it had already gone live with a product.
Bakkt aside, ICE generated $1.3 billion in revenue across the second quarter, according to a release.
ICE chief financial officer Scott Hill said ICE intends to launch its ETF Hub, a single portal for traders to take part in the exchange-traded fund market, in the coming months. The company believes the ETF market might double in the next few years.
Payments company Square reported its second-quarter earnings Thursday, revealing $125 million in bitcoin sales through its Cash App, nearly doubling a record first quarter.
“During the quarter, bitcoin revenue benefited from increased volume as a result of the increase in the price of bitcoin, and generated $2 million of gross profit,” the earnings report explains.
Founded by Twitter co-founder Jack Dorsey, Square reported that bitcoin represented very nearly half of the total revenue on its Cash App, at $260 million, for the second quarter of 2019. Bitcoin costs, however, are listed at $122.9 million in the unaudited quarterly report, yielding the aforementioned $2 million in profit.
On an investor call Thursday afternoon announcing the numbers, Dorsey said:
“We love you, bitcoin.”
The first quarter of 2019 was Square’s best quarter for bitcoin at the time, with $65.5 million in revenue and $832,000 in profit. Clocking $125 million in sales in the second quarter, however, represents significant growth and a new record for the company. For comparison, the company reported $166 million in bitcoin sales in all of 2018.
With a net loss for the quarter of $6.7 million on $1.17 billion in total revenue, bitcoin remains a long way away from the center of Square’s overall strategy. Transaction-based revenue in Q2 topped $775 million, according to the report.
The company sells bitcoin to users through its Cash App, a service that expanded to all 50 U.S. states in August 2018.
Earlier this week, the company clarified the role of Square Crypto, a project within the company created to make open-source contributions to the bitcoin protocol and ecosystem.
A senior research director at market intelligence firm CB Insights told CoinDesk he believes adding bitcoin is helping Square drive more usage from its customers.
“They don’t really make a lot of money on it, but it is driving engagement,” Chris Brendler said.
Canada’s transcontinental railway, Canadian Pacific (CP), has joined the Blockchain in Transport Alliance (BiTA). CP announced its new membership in an official press release on July 31.
According to the announcement, CP is looking to support improvements in supply chain technology through blockchain technology. BiTA says that by joining the group, CP is helping them to drive global supply chain interoperability.
BiTA president Patrick Duffy also commented on the potential benefits of blockchain in the transportation sector, saying that the new tech “has the potential to smooth the transactions that occur between shippers and carriers, but it requires the active participation of transportation leaders like CP.”
The Blockchain in Transport Alliance
According to the announcement, BiTA has nearly 500 member organizations in the freight, transportation, logistics and affiliated industries. Members reportedly share a common goal of facilitating the adoption of new technology in these sectors, and work to both establish industry standards and provide education on blockchain solutions and distributed ledger technology.
As per a report by the Canadian Broadcast Corporation, Duffy expounded on the issue of transportation currently requiring multiple tracking systems, saying that more systems means more room for human error:
“When you order a pair of shoes and they’re manufactured in Vietnam, currently the information you put into the website where you order those shoes goes from a website into an ERP [a type of business management software] that’s transmitted to a manufacturer’s system … the possibilities of the number of people involved and the number of technology systems involved, it grows exponentially […] At each one of those steps there’s an opportunity for human-induced error.”
The blockchain-based decentralized internet browser Brave now allows Twitter users to tip content creators with its native Basic Attention Tokens (BAT).
Brave discussed the public launch of its token tipping service in an announcement on Aug. 1, wherein users can reportedly specify the amount they wish to tip a given Twitter account, and the recipient will receive their tip in BAT directly.
The announcement also lists a number of features associated with the tipping service, including setting up regularly recurring tips as well as a mechanism for Tweeting at a tipped creator to tell them how to claim their donation.
Brave began testing its Twitter tipping service in May on its testing and development browser version called Brave Nightly.
As detailed in the announcement, the new feature comes as new in-browser offering via Brave Rewards. Users who have opted into Brave Rewards will now see a tip option on Twitter posts when viewing Twitter through their Brave desktop browser. Brave Rewards also supports tipping on YouTube and Twitch, and will reportedly be coming to Reddit, GitHub and Vimeo.
Brave Rewards users can also earn the token by watching privacy-preserving ads or through traditional purchases.
At press time, BAT has a market capitalization of over $302 million and is trading at $0.237, down 3.4% on the day, according to data from CoinMarketCap.
The National Basketball Association (NBA) and Dapper Labs are teaming up to announce the launch of a digital platform for blockchain-based collectables, NBA Top Shot.
According to the companies, fans of the game can buy, sell, and trade digitally collectable in-season moves like “Kevin Durant’s 3-point shot or Joel Emiid’s dunk.” Digital collectables can be used for on-chain games or tournaments.
Similar to current products like NBA 2K, Dapper’s NBA Top Shot allows users to acquire players and build rosters with an additional hook: purchasing specific moves from the prior season.
Dapper Labs next product comes two years after the launch of CryptoKitties, the number one blockchain-based game, and months after a pre-sale and of its second major game, Cheese Wizardz.
The National Basketball Association is joined by the National Basketball Players Association (NBPA), a player’s union founded in 1954. Speaking on the matter, NBPA commerical executive Josh Goodstadt touts Dapper’s product as “an entirely new way for fans to connect with their favorite athletes.”
“We believe blockchain technology creates a truly unique product that fans can collect, manage and engage within a fun environment.”
NBA Top Shot Collectibles is set to launch this fall in time for the NBA’s regular-season tip-off, with the full game going live in early 2020. Per an email, Dapper Labs says they are “working directly with the [NBPA] to make sure players benefit from the experience.”
Dapper’s product is not the first introduction between blockchain and major league sports: the Cleveland Cavaliers recently signed UnitedCoin as its official cryptocurrency with the Miami Dolphins signing with the Litecoin Foundation last month.
Kyoto University and the University of Tokyo have joined Ripple’s University Blockchain Research Initiative (UBRI) per CoinDesk Japan. The 2018 program now boasts 33 participants including Princeton University, Carnegie Mellon, and the National University of Singapore, among others.
Ripple committed $50 million toward the project to develop blockchain, cryptocurrency, and digital network programs. Funds sent to the Japanese universities will fuel undergraduate, graduate, and PhD studies. The University of Tokyo will also issue scholarships with the funds.
“University partners will continue to increase positive awareness of the transformative impact that blockchain technology will have across various industries,” SVP of Global Operations at Ripple Eric van Miltenburg said. “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.”
Price of XRP over the last 30 days via CoinDesk data.
Academia continues to play a role in Ripple’s roadmap. The payment network announced commitments to the Brazilian Universities of São Paulo and Fundação Getulio Vargas in June as part of a greater South America investment strategy. At the time, Ripple reported it was adding two to three financial institutional partners to RippleNet per week in the region.
Competition for the firm is greater than ever, however. A recent testing report from dominant financial network SWIFT showed quickening settlement speeds. Test runs through 17 participants averaged 25 seconds per transfer. The fastest settlement took all of 13 seconds.
Still, quarterly sales for Ripple’s XRP are on the rise. Ripple’s Q2 numbers were up 50% with $251.51 million XRP sold. Following inflation criticisms, Ripple plans on slowing its sales across the board in Q3.
Two groups seeking to promote blockchain technology in the Asia-Pacific have officially merged.
Announced July 22, the Australian Digital Currency Association (ADCA) and Blockchain Australia (BA) signed documentation that will see the two groups formally combine efforts under the BA logo and brand.
ADCA is the industry’s leading network for businesses seeking to implement blockchain solutions while BA is the industry body that represents domestic organizations participating in the crypto asset economy.
Bitcoin versus the Australian dollar via CoinDesk data.
The announcement, as well as the unveiling of the group’s new logo, took place at the Annual APAC Blockchain Conference in Sydney.
Further, the news was presented by the assistant minister for Superannuation, Financial Services and Financial Technology, the Hon. Senator Jane Hume, demonstrating government support for the merger and future developments from the Australian blockchain community.
“I’m absolutely delighted to see that ADCA and BA have decided to merge, having a consistent and united voice advocating for the responsible adoption of blockchain technology,” Hume told attendees. “We need to recognize the potential for Australian blockchain businesses to tap into the demand that’s deriving from Asia’s growing middle class.”
The official merger was hosted by the Sydney Stock Exchange (SSX) and witnessed by directors and members from both organizations.
Nick Giurietto, CEO and managing director of BA, told CoinDesk:
“Bringing the two organizations together will allow the whole Australian blockchain community to speak more clearly and consistently to key stakeholders including governments and regulators and will strengthen the connections between all parts of the Australian blockchain ecosystem.”
“The merger of our two organizations creates a stronger and more united voice,” added Adam Poulton, director on the newly formed organization’s board.
Those involved in the new organization hope the merger will open pathways for greater opportunities and advancement in the APAC region.
Yesterday, ethereum celebrated its fourth birthday.
Four years ago, on July 30, 2015, the world’s first general-purpose blockchain platform went live. Called ethereum, the platform was the first of its kind to feature a Turing-complete virtual machine and native programming language able to deploy code of any algorithmic complexity.
“Before ethereum, developers had to design and write extremely complex software,” blockchain researcher Mihailo Bjelic told CoinDesk. “Ethereum introduced a generic programmable layer which abstracted this whole process and enabled developers to build decentralized applications by only writing their applications’ core logic.”
There are roughly 800 monthly active developers building on the ethereum blockchain, according to new data from investment firm Electric Capital.
“This means that the ethereum ecosystem is experimenting an order of magnitude more than almost every other ecosystem,” said Electric Capital founder Avichal Garg.
Ether prices over the last 12 months via CoinDesk data.
That said, ethereum is no longer the only general-purpose blockchain in the world, nor even the most active by some metrics. The most recent quarterly report from Dapp.comshows that while ethereum is still the first choice for developers, other decentralized application (dapp) platforms such as Tron and EOS surpass ethereum in the number of active dapp users.
That leaves many industry observers wondering where ethereum will be in another four years. Will it retain its lead as a general-purpose blockchain platform in the face of a fast-rising competition?
Eric Conner, founder of information site ETHHub and product researcher at blockchain startup Gnosis, said:
“I think in four years, Ethereum will be moving past the hardest parts of its ambitious goals around proof-of-stake and scaling. At that point, the network will be able to onboard more users and we’ll start to grow beyond the use cases we are seeing today.”
Both proof-of-stake (a comparatively more eco-friendly version of the current consensus algorithm on ethereum) and scaling are bundled into an ambitious upgrade called ethereum 2.0 that many, not just Conner, envision to be completed in the next four years of ethereum’s existence.
Said Anthony Sassano, marketing and growth lead at ethereum-based startup Set Protocol:
“I believe that ethereum will achieve the original ‘world computer’ vision within the next four years because Ethereum 2.0 will have completed its roll-out. We will have mature scaling solutions (at all layers) and we will have proper privacy solutions.”
Ethereum’s future as money
At the same time, it’s not just core bottlenecks in the technology limiting transaction throughput and efficiency that experts say will need to be resolved about ethereum in coming years. Others both within and outside of the ethereum community say in the next four years, ethereum will also have to overcome challenges associated with its monetary identity.
Yaz Khoury, director of developer relations for the Ethereum Classic Cooperative (which helps build the protocol for ethereum’s sister chain, ETC), said:
“[Ethereum] is still struggling with a monetary identity. It’s not so much a cryptocurrency as much as a dapp market and network.”
Prices for ether classic over the last year via CoinDesk data.
To this, Ryan Sean Adams, founder of another crypto investment firm called Mythos Capital, sees ethereum establishing itself as a digital currency in four years time.
“Four years from now, it’ll be obvious that ETH isn’t a utility coin, it’s money. A programmable store-of-value money,” he said. “Lending, borrowing, trading, saving. Each of these will be public protocols in the ethereum economy.”
As such, MakerDAO’s Conti thinks ethereum 2.0 and scalability challenges aren’t all that important to the immediate future of the protocol.
The continued growth of decentralized finance applications, on the other hand, is.
Mariano Conti, the MakerDAO Foundation’s head of smart contracts, said via email:
“I honestly believe that even if Ethereum 2.0 is significantly delayed, what we have right now is good enough for proper Decentralized Finance in the next three or four years. I expect more companies paying their employees streaming salaries in DAI. … I also expect (dread) the first big DeFi hack to happen soon, and this’ll be something to watch out for.”
What ethereum investors are saying
On the flip side, major investors in ethereum say they aren’t worried about how the platform will transform in the next few years. On the contrary, progress in the last four years of ethereum’s existence has only proven to cement the technology’s lead.
“Ethereum has progressed significantly in making it easier for developers to build,” said Scalar Capital founder Linda Xie. “There’s improved language, tooling and infrastructure. It’s still a work in progress but it’s much easier to build an application now than in the early days.”
Mythos Capital’s Adams estimates that close to $15 billion worth of tokenized assets have been generated on ethereum thus far. These assets will continue to snowball in popularity and generate even greater value for the ethereum platform in future years, says Adams.
“We’re also seeing a first generation of [decentralized finance] protocols [on ethereum], with $500 million locked in lending and exchange protocols over the last 18 months,” Adamas said via email. “These protocols will form the banking layer of this new open finance system.”
2019 alone has been and will continue to be an inspiring year for ethereum, said Paul Veradittakit, a partner at Pantera Capital, the oldest U.S. bitcoin investment firm which has invested in over 20 different ethereum-based startups to date.
“The Ethereum community has stayed focused during bull runs and kept faith during the crypto winter,” Veradittakit said, adding:
“That focus on building is really paying off, and the ecosystem is healthier and richer because of it. So many great Ethereum projects are set to launch this year, and it’s been incredibly inspiring to watch.”
A team of former Royal Bank of Scotland (RBS) engineers is bringing trading and settlement of digital assets, including cryptocurrencies, to a private blockchain network originally developed for enterprise.
Revealed exclusively to CoinDesk, London-based LAB577, led by ex-RBS innovation lead Richard Crook, is rolling out its first platform offering, the Digital Asset Shared Ledger (DASL, pronounced “dazzle”). DASL is built on top of the Corda Network, the open-source blockchain system created by R3, a bank consortium that once personified the “blockchain, not bitcoin” ethos of 2015-2016.
As such, it’s a sign of how much the industry has evolved that DASL will be used to facilitate the trading of bitcoin, ether, and the like.
Crook told CoinDesk:
“Crypto is clearly converging with blockchain. We spent quite a lot of time in 2015 separating the two, to make sure we could have a conversation about blockchain, and now here we are converging the two back.”
Ether prices over the last 12 months via CoinDesk data.
LAB577 is working with prime brokerage BCB, which will park its clients’ assets, both fiat and crypto, with custodians; mirrored representations of these assets will trade on Corda, in a process known in blockchain parlance as layer 2 settlement.
(A similar arrangement is in the works to bring ethereum tokens onto the architecture R3 is building for Swiss stock exchange SIX.)
In this way, investors will be able to conduct both legs of a trade, whether fiat-to-crypto or crypto-to-crypto, on the same system, and have them settle instantly and simultaneously, instead of waiting days for a bank transfer, or minutes (sometimes hours) for a public blockchain confirmation.
BCB says it has a pipeline of clients to bring to Corda via DASL including a couple of big banks.
Oliver von Landsberg-Sadie, BCB’s founder and CEO, said his firm is already live with a couple of beta clients, settling ethereum and British pounds bilaterally in a kind of closed environment.
“It is live in the sense that it’s using the live Corda network and live Corda nodes, but not yet a released product out in the wild,” he told CoinDesk. (Crook said BCB will be migrating from its old tech stack over the coming months.)
Apart from speed, Crook said plugging a crypto prime brokerage into the Corda Network (the free, open-source version of R3’s tech) makes sense because you have to be a known legal entity to operate on that network.
Richard Crook on stage at TechXLR8, image courtesy of LAB577.
In other words, banks and financial institutions can rest assured they are meeting things like anti-money-laundering and sanctions compliance.
“DASL wants to assist those regulated financial institutions to be able to deal with digital assets,” said Crook. “It could be something they want to issue themselves like debt or equity. It could be cash. And some of them do want to handle crypto.”
For prime brokerages, a core challenge of crypto is negotiating a host of network structures, wallets, proprietary blockchain protocols and so on. Similarly, on the fiat side, a unified settlement layer is lacking, said Landsberg-Sadie. The U.K. has a leg up with its Faster Payments system, he added, but firms still have to deal with a mishmash of payments systems in different jurisdictions.
Landsberg-Sadie pointed to certain operational challenges around storing and moving crypto safely, and also accounting for it in a unified way, adding:
“What we have always been on the lookout for is something which is a credible institutional bridge and a kind of settlements layer for cash and for crypto.”
To be fair, similar sorts of off-chain settlement arrangements have been created recently. These include tie-ups between custodians and trading firms (BitGo with Genesis Trading; Kingdom Trust and OTCXN) and networks built by crypto-friendly financial institutions for their clients to trade with each other (Silvergate Bank; Signature Bank; and Prime Trust).
In the DASL solution, BCB parks crypto in cold, or offline, storage with Volt, a crypto custodian which works with insurance broker Aon. The equivalent in the fiat world is physical bank accounts, which in the case of British pounds will be BCB’s banking partner, ClearBank, said Landsberg-Sadie.
Using Corda as a settlement layer also addresses the scaling problem which has dogged the cryptocurrency industry for years, added Landsberg-Sadie. Two counterparties exchanging a bunch of litecoin, for example, would be unaffected by the transaction time of the public blockchain to settle.
“You don’t need to move the physical litecoin out of its cold storage, you can just represent these as ledger entries on Corda,” Landsberg-Sadie said.
Stepping back, settling the fiat side of trades on a blockchain instantly with cash on the ledger is an alluring proposition well beyond the crypto markets.
A lot of work is being done to bring digital fiat to distributed ledgers, with projects like Utility Settlement Coin drawing a lot of attention.
Crook, whose team started the work of building bridges between public and private blockchains while at RBS with projects like Cordite, said the likes of BCB and also SDX coming on Corda creates a rising tide which will also lift pure enterprise plays being built on the network.
“In the case of trade finance, you want to have stores of value on-chain which the Marco Polos and the TradeIXs of the world can use,” he said, referring to a Corda-based trade finance consortium. “So you can get the goods and services to flow one way across the ledger and the payment for those goods and services to flow the other way on the same ledger.”
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.
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.
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 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.