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“For a panel about a proposed cryptocurrency, Tuesday’s Senate Banking Committee hearing was notably light on crypto talk. Bitcoin was barely mentioned during the two-hour session and most of the lawmakers seemed far less concerned with the technology than with who was planning to leverage it: Facebook.”
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Facebook’s David Marcus faced a cacophony of fear, uncertainty and doubt surrounding the social media giant’s plan to launch its digital currency Libra during a Senate hearing Tuesday, following criticisms from a wide range of regulators and lawmakers around the globe.
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Simply put, the Libra Masterplan is borrowing pages from the Bitcoin playbook and the WeChat playbook both at once. If successful, it makes the Libra accessible to everyone on the planet while offloading the regulatory burden of operating the on- and off-ramps to other business.
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As currently proposed, the Libra Reserve, in essence, is a pooled investment vehicle that should at a minimum, be regulated by the SEC, with the Libra Association registering as an investment advisor.
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“Cryptocurrencies have given rise to an entire new criminal industry, comprising unregulated offshore exchanges, paid propagandists, and an army of scammers looking to fleece retail investors. Yet, despite the overwhelming evidence of rampant fraud and abuse, financial regulators and law-enforcement agencies remain asleep at the wheel.”
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Libra is put in perspective by comparing it to like financial instruments, new and old, shedding some light on the purpose, intended user, regulatory issues – and more important, on the path Libra must follow to achieve success. The article also exposes the vast gaping holes in Facebook’s description of Libra.
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The authors warn of several financial stability risks that digital currencies pose. Many of their points echo recent comments by two senior Chinese central bank officials. The authors suggest central banks take the first step towards their own digital currency by offering settlement services to e-money providers.
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In its latest paper “The Rise of Digital Money” that marks the launch of a new series Fintech notes, IMF analyses how technology companies are stepping up the competition to credit card companies and large banks.
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The International Monetary Fund (IMF) has argued that network effects could spark the blaze for the mass adoption of new digital monies.
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BitMEX has finally released the unedited video of its CEO, Arthur Hayes, debating noted economist, Nouriel Roubini, at the Asia Blockchain Summit earlier this month. The 53-minute long discussion ventured into uncomfortable territories of both the bitcoin and mainstream finance. While Roubini kept his focus on the criminal nature of cryptocurrencies and their evangelists, Hayes projected them as a means to promote financial privacy.
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The World Economic Forum released a guide for the evaluation of the benefits of blockchain applications. The document delves into how to apply blockchain technology, providing six recommendations for companies.
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For many mobile is the primary – or only – way to get online. Last year alone, almost 300 million further people connected to mobile internet. The extent and progress of mobile internet connectivity is explored in detail in the GSMA’s State of Mobile Internet Connectivity Report.
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Perhaps the most useful thing that disruptive technologies such as cryptocurrencies have done is to kick existing payments providers out of their complacency. Two days after Facebook announced its One Cryptocurrency To Rule Them All, the international messaging service SWIFT announced its own plan for world domination.
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This paper defines fintech as an innovation enabled by one or more technological ‘triggers’ that have potential to provide value through enablement or disruption in the financial services industry. It proposes a framework to understand fintech in terms of customer type, industry subsector and enabling technology.
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For cryptocurrencies to be broadly accepted forms of digital money they will need consumer trust and confidence. Building consumer confidence in new digital currencies will require participation of intermediary institutions and a much greater level of regulation than currently exists. In response to concerns about existing forms of cryptocurrencies, governments are likely to investigate or implement their own digital currencies to prevent disruption to sovereign money and the ability to manage the wider economy.
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There have been significant pricing effects sourced from both fraudulent and regulatory unease within the industry. Bitcoin futures dominate price discovery relative to spot markets. CBOE futures are found to be the leading source of informational flow when compared directly to their CME equivalent
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PayPal launched Xoom—its international money transfer service—in 32 markets across Europe.
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The “Banning of Cryptocurrency and Regulation of Official Digital Currencies” bill, which proposes to ban or heavily restrict all cryptocurrency-related activity in India, was leaked this week.
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Scaling Ethereum without breaking it is a monumental task. Development roadmaps have regularly been delayed. Founder and Ethereum developer Vitalik Buterin thinks that the next era of Ethereum is at least a year off, but in the meantime, Bitcoin Cash may have all the properties needed to scale.
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What is still needed for institutional adoption to take place, say experts, is more cooperation among the rising number of firms that are jumping into the market, and a process of consolidation. How long all of that will take is a matter of some debate, but the market’s early adopters are acting as if it will be sooner than later.
