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For the first time, it seems, a sitting US president has acknowledged Bitcoin as a threat. Ironically, this indicates progress for crypto. “First they ignore you, then they laugh at you, then they fight you, then you win.” Mahatma Gandhi
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“The move from $4k-$10k was based on a confluence of real factors (Yuan depreciating, the Fed, etc), but the move from $10k to $14k, and back to $10k and back to $13k, and back to $11k was all based on leverage.”
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The BoJ is continuing to examine CBDC. Recent intiatives include continuing DLT research (eg Project Stella with the ECB) and an internal study group on potential legal issues around BoJ CBDC issuance (a report will be released in due course).
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An urgent priority for the Fed and other central banks is to move ahead with the provision of digital cash as a means of mitigating the effective lower bound. This approach will ensure that monetary policy will be systematic, transparent, and effective during normal times and in responding to severe adverse shocks.
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CBDC can leverage the decentralized and secure advantages of blockchain. This enables P2P transactions, offers a more resilient payment infrastructure, reduces transaction costs, enhances information sharing capabilities and facilitates data reconciliation. Blockchain enabled payment solutions have been rigorously tested by central banks across North America, Europe and Asia.
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Libra’s future remains murky. Facebook is months away—at least—from actually launching a network. The documents Facebook released in June left a lot of unanswered questions about how the network will actually work—and in particular, how the network will deal with the wide range of legal and regulatory requirements that apply to payment networks.
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Facebook is seeking a professional researcher with a PhD degree in economics to “initiate and execute projects around topics such as auction design, economic incentives in consensus protocols, market concentration, and macroeconomic aspects of the Libra currency,”
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Former Banque de France deputy governor Jean-Pierre Landau argues that the network effects created by the aggregation of a vast range of activities in financial “platforms” create externalities very similar to those that underlie the creation of money. The report highlights three implications. First, the financial system could become “payment centric” – with bank deposits no longer the dominant form of private money. Second, digital interconnectedness may create around such networks digital currency areas, a development that could fragment some monetary systems. Third, national borders may not constrain such digital currency areas, and the currencies of those countries where digitalisation proceeds fastest (and where networks become the biggest) may become more widely used internationally – “digital dollarisation”.
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Philippines’ central bank reported that e-wallet penetration is growing faster in the Philippines and has surpassed credit card numbers.
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Goldman Sachs is now hiring a cryptocurrency project manager. The firm wants their new project manager to lead the development of Distributed Ledger Technology. The Wall Street bank’s foray into cryptocurrency is part of its GS Accelerate initiative.
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Japanese crypto exchange Bitpoint has suspended all services after losing $32 million in a hack involving XRP, Bitcoin (BTC) and other cryptocurrencies.
Month: July 2019
Kiffmeister’s Fintech Daily Digest 07/11/2019
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Fidelity Digital Assets Is Hiring 10 More Blockchain and Trading Experts
Fidelity Digital Assets, the crypto-focused branch of the major asset manager, is looking to boost its team with the addition of 10 new blockchain professionals.
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Fidelity, Deloitte, Amazon support new blockchain accelerator
Fidelity, Deloitte, Amazon, and 20 other firms are backing a new blockchain accelerator program to mentor budding entrepreneurs in the space.
tags: Fintech CryptoAssets Blockchain
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‘Lots of Shady Stuff’: BitMEX Posts Part of Debate Between CEO and Nouriel Roubini
In a dramatic bit of stagecraft, BitMEX has finally released the “tapes” from its so called Tangle In Taipei, a July 3 debate between CEO Arthur Hayes and NYU Professor and so-called Dr. Doom, Nouriel Roubini. It even comes with dramatic fight music.”
tags: Fintech CryptoAssets
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Wala Was Africa’s Perfect Crypto Success Story – Until It Collapsed
For a moment, it worked as planned. As CoinDesk reported last summer, a user in South Africa could pay their mom’s electricity bill in Uganda using a crypto-powered payments app called Wala. But despite early traction in facilitating remittances and other small payments for Africa’s underbanked, Wala was effectively broke by early 2019, laying off its staff and closing access to the company’s flagship app in February.”
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Bitcoin Use Soars in Zimbabwe After Foreign Currencies Ban
Peer-to-peer Bitcoin transactions in Zimbabwe recently reached a new high after President Emmerson Mnangagwa reinstated the Zimbabwe dollar. The ban also prohibits the settlement of local transactions in the British pound, South African rand, the US dollar, and other foreign currencies.
tags: Fintech CryptoAssets Bitcoin
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Cyber Incident Response and Recovery: FSB Survey of Industry Practices
The FSB is developing a toolkit of effective practices relating to a financial institution’s response to, and recovery from, a cyber incident. The toolkit aims to provide financial institutions and authorities with a set of effective practices and will be based on the shared experience and diversity of perspectives gathered by the FSB, including through responses to its survey of industry practices.
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Ghana is Africa’s fastest-growing mobile money market
Ghana has recently become the fastest-growing mobile money market in Africa, with registered accounts increasing six-fold between 2012 and 2017.
tags: Fintech MobileMoney
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Introducing Lightning Payments – Fold
United States-based payments startup Fold has made Lightning Network (LN) payments possible at Amazon, Starbucks, Uber and other big name retailers. The news was revealed in an official blog post published on July 10.
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Some Considerations on Central Bank Digital Currencies | Banco de Mexico
The number and nature of the pending question marks around CBDC underlines the relevance of continued efforts to satisfactorily understand this matter as well as its potential consequences… We are dealing with an issue with potential major implications and still many unknowns.
tags: Fintech CryptoAssets AltCoins CBDC
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Kenyan regulators oppose M-Pesa split plan
The Kenya Information Communications (Amendment) Bill, 2019 is seeking the registration of mobile money services as separate business units. It would compel the telecommunications regulator to ensure that mobile money services are licensed as banks.
tags: Fintech Stablecoins Regulation
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JP Morgan is rolling out a robo-adviser with free ETFs to lure new investors
After a year of fine-tuning, which included user trials at 27 branches in Brooklyn, JPM is releasing on Wednesday a digital investing service called You Invest Portfolios. For an annual fee of 0.35% of assets, or 35 basis points, JPM will put users into an investment portfolio made up of the bank’s ETFs
tags: Fintech ETFs AI RoboAdvising
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Only three global banks given top website security score by ImmuniWeb
In an application security, privacy, and compliance probe, testing firm ImmuniWeb highlighted the concerning state of security at the worlds largest financial institutions, handing only three an A+ result for SSL encryption and website security.
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Crypto Payment Platforms Offer Working Examples — Competition Heats Up
With mainstream society increasingly accepting Bitcoin (BTC) as a means of payment, financial firms are increasingly seeking to offer a frictionless and convenient means for consumers to make payments using crypto.
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Top-6 Issues Experts/Entities Have With Libra
The biggest threat to Facebook’s financial inclusion plans are the government authorities in those developing countries. Furthermore, individuals without access to bank accounts in those countries are typically those with bad credit history or those who fail to comply with AML/CFT/KYC requirements
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Binance Launches Platform ‘2.0’ as Margin Trading Goes Live
Binance has launched version 2.0 of its platform – a move that officially adds margin trading for its customers. Binance indicated that maximum leverage (the amount that can be borrowed against a user’s crypto collateral) is 3x.
tags: CryptoAssets Liquidity Leverage Fintech
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Winklevoss-backed Crypto Self-Regulatory Group Prepares to Woo Congress
The Virtual Commodity Association, a non-profit, independent organization backed by Gemini founders Cameron and Tyler Winklevoss, is laying the groundwork to advocate its self-regulatory plans before Congress.
tags: Fintech Regulation CryptoAssets
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Canada’s Crypto Exchanges Must Now Register as MSBs, Report Transactions Over $10K
The Canadian government Amended its Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Canadian and foreign crypto platforms must now implement a full AML/CFT compliance program and register with the Financial Transactions and Reports Analysis Centre of Canada.
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New SEC/FINRA Staff Statement On Digital Securities Favors Wyoming
The State of Wyoming just got a big boost from the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Their recent joint staff statement on broker-dealer custody of digital securities provides support for Wyoming’s regulatory approach to the custody of digital assets.*
tags: Regulation CryptoAssets Fintech Custody
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SEC Clears Blockstack to Hold First Regulated Token Offering
The SEC approved the $28 million offering under Regulation A+, an alternative to an initial public offering meant to help fledgling businesses raise capital, a lawyer for Blockstack said. The company plans to begin selling the tokens to the public Thursday through a website created for the offering.
tags: Regulation Fintech CryptoAssets ICOs
Kiffmeister’s Fintech Daily Digest 07/10/2019
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China’s cabinet, the State Council, has given the go-head for the next stage of the central bank’s digital currency programme, according to Wang Xin, director of the central bank’s research bureau.
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The Turkish government economic roadmap includes a bid to create a central bank digital currency based on blockchain technology.
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This blog by ex-IMFer (1976-2003) Warren Coats suggests that the IMF get to work developing a digital SDR, to build the foundation on which the SDR can become a more important international reserve asset.
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Libra is the first private cryptocurrency with the potential to change the worldwide payment and monetary system landscape. Due to the scale and reach provided by its affiliation with Facebook, the question will be not whether, but how, to regulate it. This short paper introduces the Libra project and analyses the potential responses open to regulators worldwide.
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Libra could face difficulty entering Thailand because the blockchain-integrated cryptocurrency does not fall under any type of financial legislation, according to a government legal expert.
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Facebook has said that current regulatory restrictions mean it won’t be launching its digital wallet service and cryptocurrency in India. The RBI has effectively banned banks from providing services to crypto-related firms.
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“Similar to existing and widespread cryptocurrencies such as ethereum and bitcoin, transactions that take place directly on the Libra Blockchain are ‘pseudonymous,’ meaning that the user’s identity is not publicly visible.”
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A bill aimed at alleviating the tax burden of cryptocurrency investors was reintroduced today by U.S. Congressman Tom Emmer. The “Safe Harbor for Taxpayers with Forked Assets” bill attempts to bring tax clarity around hard forks.
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The Provident Bank now offers deposit and other banking services to cryptocurrency issuers, exchangers and investors. The bank deploys Bitfury’s blockchain analytics tool Crystal that maps cryptocurrency transactions and related entities to reveal suspicious funds and parties.tags: Fintech CryptoAssets
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The NY Attorney General’s office, which is embroiled in a legal battle with Tether Bitfinex, filed new documentation showing that Tether held accounts at Metropolitan Bank and Signature Bank, two crypto–friendly banks based in the state.
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Crypto custodian Anchorage has raised $40m in Series B funding, with participation by Visa and Andreessen Horowitz who both happen to be Libra founding members.
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A new trading platform for security tokens has launched with backing from Singapore Exchange. The 1X platform went live with its first listing of an ethereum token, purchasable with Singapore dollars. The token represents about 7% of the shares of Singapore fund manager Aggregate Asset Management.
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This paper considers the various requirements for identification in the financial sector and the evolving nature of identity and its evolution from analogue to digitized to digital.The establishment of such utilities for digital or electronic identification requires addressing design questions such as registration methods, data availability and cross-jurisdiction recognitions. Yet, as with any reform, a balance between flow-through efficiency and cyber-security needs to be reached to ensure the objectives of financial inclusion and market integrity are not achieved at the detriment of financial stability.
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South Koreans are increasingly going cashless as more people turn to e-wallets in South Korea for both online and offline purchases.
Kiffmeister’s Fintech Daily Digest 07/09/2019
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The US SEC and FINRA have outlined regulatory compliance issues for cryptocurrency custodians. According to the joint statement, the organizations have yet to discover a set of circumstances in which a crypto custodian could comply with the SEC’s Customer Protection Rule.
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The SEC said that firms hoping to adapt bitcoin’s technology to uses such as raising capital for private companies could satisfy regulators’ concerns. That means a limited number of crypto firms could be approved as digital-asset brokers in the near future.
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The ShapeShift platform allows users to buy, sell, trade and track multiple cryptocurrencies in a single place, with over 50 digital assets currently supported. It requires a connected hardware wallet, like Trezor or KeepKey, to eliminate counterparty risk.
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The Libra representatives kept selling Libra as a means of providing banking services to 1.7 billion unbanked people around the world. When challenged on how they were going to do that, and asked directly whether they’d figure out how exactly a digital currency would be an answer for people who can’t access credit currently, they said, “The short answer is no.” The phrase “the miracle of blockchain” was used at one point.
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Sheila Bair: “It’s open to question whether Mark Zuckerberg and Facebook are the right stewards for a new global crypto-currency. But by firing this warning shot to government policy makers that such a change is coming and potentially coming soon, they have done a public service.”
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Mu said the PBOC’s research team tested Libra’s code and found it’s “still in an initial stage and the quality of the code isn’t stable.” He also said it’s questionable whether Libra would indeed use blockchain technology, because it can’t meet the high concurrent transaction requirements necessary for retail sales scenarios.
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The PBOC’s blockchain trade finance solution processed over 30 billion yen in FX transactions. The platform is supported at 483 branches of 28 banks in Shenzhen and is currently operating normally. Still, due to an allegedly uneven adoption of financial technology, the business volume is still proportionately small.
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IDG-backed KuCoin has announced the beta launch of its derivatives trading platform, KuMEX. To start, the new platform will offer trading of its so-called Bitcoin Perpetual Contract (XBTUSDM).
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When South Korean investors piled into Bitcoin in late 2017, its price in Korean won soared even higher than the dollar, with Korean traders paying up to fifty percent more than westerners. With this ‘kimchi premium’, as it came to be known, returning to the market, what are the implications for Asian traders and for Bitcoin?
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This week derivatives exchanges LedgerX and ErisX were given the green light to offer physically-settled bitcoin futures contracts, beating VanEck and Bakkt to market.
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The New York Attorney General’s Office (NYAG) has submitted a series of new evidence in its aim to prove the crypto exchange Bitfinex and Tether had served New York customers longer than it claimed.
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Outside of tokenomics, there is a lot more power in the blockchain, especially in regards to smart contracts. Thus, a recent partnership between Google and Chainlink, a company that provides on ramps and off ramps for information necessary to run smart contracts, may hint at Google wanting a bigger slice of the pie.
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Bitcoin is receiving capital flows from two sources: as the primary on-ramp for fiat-based flows and as one of the primary quote currencies in markets for smaller assets. The slowing pace of new assets coming to market through ICOs has kept the growth in global supply muted. Capital and investor interest has remained mostly concentrated in Bitcoin.
Kiffmeister’s Fintech Daily Digest 07/08/2019
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The circulating supply of the Winklevoss twins’ stablecoin Gemini Dollar (GUSD) is plummeting. From a peak market capitalization of more than $100 million in December of 2018, the coin recently hit new lows of $10 million. https://www.cryptopolitan.com/gemini-dollar-down-88-percent-in-market-cap/
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The plummet in Gemini Dollar market cap started some time ago…
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Facebook’s plans to create its own cryptocurrency have forced China’s central bank into stepping up research into creating its own digital currency as Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and even financial sovereignty, Wang Xin, director of the PBOC’s research bureau.
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South Korea’s Financial Services Commission looks at what might occur if 2.4 billion Facebook users worldwide transfer one tenth of their bank deposits to Libra. Should that scenario come about, banks’ solvency would diminish, as would their loan reserves, representing a threat to emerging markets from the relocation of the capital out of those countries. The FSC also raised concerns that bank runs could occur during financial or foreign exchange crises, as people move their national fiat currency to Libra.
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European Libra users will have to treat their Libra holdings as an asset for capital gains tax purposes — and for the UK, HMRC confirms that, as a basket of currencies, Libra doesn’t qualify as a currency itself. “The problem would potentially be even more serious with no annual capital gains exemption in France, Italy or Spain and a much smaller €600 limit in Germany.”
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The Bangko Sentral ng Pilipinas (BSP) remains lukewarm to the idea of issuing its own digital currency despite the decision of Facebook to unveil its own cryptocurrency, Libra.
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“I am not sure why there is such a discrepancy between the interest in Bitcoin (as measured by google searches in the U.S.) and the price. Until recently, there was a reasonably high degree of correlation between Bitcoin prices and interest in bitcoin.”
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High-frequency trading is becoming commonplace in crypto, too. Placing trading servers physically close to exchanges’ matching engines can win an edge on speed. This helps HFT firms make large profits in the legacy markets. Crypto exchanges such as ErisX, Huobi and Gemini are trying to attract large algorithmic traders with colocation offers.
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Built on R3’s Corda platform, FundAdminChain aims to bring the distributors, transfer agents, custodians and other intermediaries involved in the buying and selling of units in a fund onto a distributed ledger. The blockchain is targeting transfer agencies and messaging, to begin with, and then aims to build out into asset services. https://www.coindesk.com/ex-r3-execs-new-mission-run-100-trillion-fund-trade-on-private-blockchains.tags: Fintech Blockchain
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Regulators may be seeing a distorted picture of global credit markets because they are failing to fully account for “fintech shadow banks”, Amit Seru said in recent remarks. The professor of finance at Stanford University told an audience of central bankers in Basel that lending originating in the shadow banking sector had “dramatically increased” in recent years. Many of these firms were taking advantage of financial technology and lighter regulations to grow rapidly, he said.tags: Fintech Regulation
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According to a study conducted by JD Power, 54% of customers don’t fully trust their primary banks, and 83% customers say their bank representatives do not spend enough time identifying their specific needs before offering products and services.tags: Fintech
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The Inland Revenue Authority of Singapore is proposing to end the GST that is imposed on crypto-assets. Under the existing rules, users of crypto-assets are taxed twice when they use them to pay for goods and services. This is because the IRAS treats such a transaction as a barter trade that results in two separate cases of supply – a supply of the digital payment token as well as the supply of the services and goods paid for using the digital asset. Additionally, the IRAS also requires digital payment tokens to not be based on the value of other fiat currencies. This effectively rules out stablecoins and Libra, which will not qualify as a digital payment token per IRAS’ definition.
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With PSD2’s Regulatory Technical Standards (RTS) deadline fast approaching, Swedish open banking platform Tink is claiming that European lenders have failed to provide the proper technology environment for third party providers to access payments data as required by the new law.tags: Fintech OpenBanking
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Nouriel Roubini debated Arthur Hayes of BitMEX — and BitMEX is refusing to release the full recording, instead releasing “edited highlights.” Roubini is threatening to sue. However, Mike Dudas from The Block has posted his notes from the debate.tags: Fintech CryptoAssets
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The UK has long played a highly influential role in charting the course of finance. The recommendations in this review will, I hope, create substantial benefits for UK consumers and businesses and underpin a more resilient, effective and efficient wholesale and retail financial system. I hope they will also prove useful to the many central banks around the world wrestling with similar challenges.tags: Fintech
Kiffmeister’s Fintech Daily Digest 07/07/2019
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Even relatively simple fiat-backed stablecoins could be characterized as swaps or demand notes, both of which would be treated as securities. And the SEC’s head of digital assets, Valerie Szczepanik, confirmed at a hearing last week that it does not matter that the stablecoin ‘does not have an expectation of profits’ (with the usual caveat of “facts and circumstances”).
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The Token Taxonomy Act of 2019 would require amending US federal securities legislation to exclude crypto assets from the definition of a security, and to create a de minimis exemption from taxation for gains realized from the sale or exchange of virtual currencies.
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A review of their technical documentation describing the Libra protocol and the associated ecosystem, reveals that they left out the foundational components of user security: Protection of the private key, proof of user consent, decentralized compliance and global privacy.
Kiffmeister’s Fintech Daily Digest 07/06/2019
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US SEC seeks blockchain data provider to monitor risk, improve compliance, and inform policy
The U.S. Securities and Exchange Commission (SEC) is getting ever more serious about blockchain data, as it seeks more data on public blockchains.
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Avoid State Taxes on Crypto With US Supreme Court’s Recent Trust Decision?
In North Carolina Dept. of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, the U.S. Supreme Court unanimously said that a state could not tax out-of-state residents on trust income without minimum contacts.
tags: Fintech CryptoAssets Taxation
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CME Group is set to make changes to its reference rate and index tied to ether. Sources say it could mean a future tied to the crypto is coming to its marketplace.
tags: Fintech CryptoAssets AltCoins Ethereum fu
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A Monetary Review of Project Libra — Part 1: The Libra Reserve
This article seems to sppeculate that the Libra Association will effectively run open market FX operations to maintain the stability of the Libra against the currency basket. Although the article doesn’t mention it, I guess it’s implicit that the huge cash balances of Facebook ($50B+) and other Association members are in effect FX reserves for these purposes.
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ZenGo Introduces Non-Custodial, Keyless Competitor to Calibra Wallet
The developers at ZenGo, an Israeli startup that recently released a keyless, non-custodial retail wallet, just published open source code for Libra’s first non-custodial wallet, just two weeks after Facebook’s announcement.
Kiffmeister’s Fintech Daily Digest 07/05/2019
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Deputy Governor Amamiya said the BOJ has no plans to issue digital currencies for now, partly due to uncertainties over how it affects conventional commercial banking. He also brushed aside the idea that central banks can boost the effectiveness of negative interest rate policies by issuing digital currencies, as it would require the elimination of cash.
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JPM Coin (JP Morgan), USC (UBS and twelve others), J Coin (Mizuho and a consortium of Japanese banks), MUFG Coin (Bank of Tokyo-Mitsubishi UFG), and Signet (NY-based Signature Bank).
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Fujitsu is developing a digital identity exchange technology that uses blockchain to prove reputation and improve trust in validating a user. It makes it possible for individual users and service businesses involved in online transactions to confirm the identity of the other parties.
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Our previous post in November last year provided compelling empirical evidence that USDT printing was used by Bitfinex to manipulate the BTC/USD price upwards during the fourth quarter of 2017. And until the current allegations are proved one can only conjecture, but we conclude that the crypto market is now entering its second tether bubble.
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“SIX MONTHS OF 2019 are on the books already, and certainly there have been six months’ worth of data breaches, supply chain manipulations, state-backed hacking campaigns, and harbingers of cyberwar to show for it. But the hallmark of 2019, perhaps, is feeling like the worst is yet to come. Ransomware is an ever-growing threat, corporate and US government security is still a mess, and geopolitical tensions are rising worldwide.”
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The US$1 trillion that traditional retail and commercial banks have invested globally over the past three years to transform their IT operations has not yet delivered the anticipated revenue growth, according to a new report from Accenture.tags: Fintech
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Banco BTG Pactual will with Dubai’s Dalma Capital to host a deal pipeline of $1bn for existing and future prospective security token offerings. They plan to utilize the Tezos blockchain, which will include a range of tokenized traditional and alternative investments.
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“What the Libra discussion totally misses is how consumers are going to get value into the Libra system in the first place. If I have cash, how do I put funds on Libra? I’m going to need to go through a bank or other financial institution, and it’s not going to be free. Same if I want to take money out of Libra.”
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Libra is a massive money market fund that doesn’t pay any interest to coinholders, probably in part to avoid being qualified as a security by the SEC. It does, however, pay this interest to Libra Association members, who all have massive idle cash reserves to park profitably at the Libra Association. For example, Facebook, which has over $40 billion in cash liquidity, could “pre-mint” Libra, which it will then sell to users, and buy it back when they want to get out of it.
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My best guess is that Libra is meant to be like a mutual funds share, redeemable (by authorized resellers, not by the public directly) at the net asset value of a low-risk mutual fund diversified across several fiat currencies. The public can buy and sell Libra “coins” in exchange for existing fiat money. Also, unlike an ordinary mutual fund, which allows members of the public to buy shares directly and sell them directly back to the fund at their current net asset value, Libra only allows Resellers to interact directly with the Libra Reserve.
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“There is no longer any doubt that high-altitude balloons can be used to provide cellular service to remote locations or places reeling from natural disaster. The question for Loon — an Internet-providing balloon service owned by Alphabet, Google’s parent company — is whether that technology is commercially viable.”tags: Fintech MobileMoney
Kiffmeister’s Fintech Daily Digest 07/04/2019
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Riksbank’s Hanna Armelius: Central banks need to consider issuing digital currencies or leave citizens vulnerable to market power. Cashless societies could leave payment systems vulnerable to “increasing monopoly power … if there’s no sort of competition from central bank money.”
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The Cambridge Centre for Alternative Finance has launched the CBECI. The index provides a real-time estimate of the total annual electricity usage of the Bitcoin network and enables live comparisons with alternative electricity uses in order to put numbers into perspective.
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With an estimated population of 110 million, and an average age of 18, Africa’s second most populous country, Ethiopia has been the continent’s sleeping giant on the tech scene. However, Ethiopia’s first ever tech event, ‘Startup Ethiopia’, and the ‘Innovate Ethiopia’ week around it, showcased the country’s brimming potential and seems to be a harbinger of things to come.tags: Fintech
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Good digital ID requires the following four attributes: it can be verified and authenticated to a high degree of assurance, it is unique, it is established with individual consent, and it protects user privacy and ensures control over personal data.
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Digital ID holds the promise of enabling economic value creation for each of these three groups by fostering increased inclusion, which provides greater access to goods and services; by increasing formalization, which helps reduce fraud, protects rights, and increases transparency; and by promoting digitization, which drives efficiencies and ease of use.
Kiffmeister’s Fintech Daily Digest 07/03/2019
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In recent months, some cryptocurrency firms have begun touting structured products linked to the price of bitcoin, with complex formulas determining how much they pay out. It is still a small market, and the firms say their products aren’t aimed at mom-and-pop investors. But the trend is raising red flags among some market veterans.
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Luxembourg-based Argento has launched a series of bitcoin (BTC) bonds. Various durations are available, conspicuously named after crypto-specific phenomena such as FOMO, HODL and MOON.
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The backlash against Facebook’s Libra project has begun. The House of Representatives’ Committee on Financial Services has written to Mark Zuckerberg, Sheryl Sandberg, and the chief executive of Calibra, David Marcus, asking for a moratorium on the development of both Libra Coin itself and Facebook’s bespoke wallet, Calibra.
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Facebook’s blockchain head, David Marcus, wrote a blog post trying to clear up some common questions about Libra. Among the points: Facebook won’t control the currency, and it’s meant primarily to help unbanked and underbanked people participate in the financial system. If Facebook benefits, it will be because people find it easier to transfer money using Facebook products.
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Exactly what kind of money will Libra be? The white papers under-specify the core mechanism that is supposed to control the value and quantity of Libra. Is the Libra Reserve really like a currency board? Or is Libra meant to be like a mutual funds share, redeemable (by authorized resellers, not by the public directly) at the net asset value of a low-risk mutual fund diversified across several fiat currencies?
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The real problem with our existing currencies and financial arrangements, which serve as a means of payment as well as a store of value, is the lack of competition among, and regulation of, the companies that control transactions. As a result, consumers – especially in the US – pay a multiple of what payments should cost, lining the pockets of Visa, Mastercard,
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Markus Brunnermeier et al., argue that new kinds of currency areas will emerge, held together by digital interconnectedness, and cutting across borders, increasing currency competition and, in the process, possibly redefining the international monetary system.
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In June, CME bitcoin futures set a new record for open interest amid a surge of new account sign-ups. More than 2,960 accounts have traded their bitcoin futures since launch, and more than 950 new accounts have created in 2019. In addition, the there are now 49 entities that hold contracts worth at least 25 BTC.
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CipherTrace and Shyft have launched a blockchain-based identity and attestation platform aimed to help crypto firms meet the new FATF “travel rule” while still maintaining user privacy. The firms will build KYC and AML ecosystem in which participating exchanges can securely transfer Proof of Knowledge without disclosing personally identifying information.
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Compared with Bitwise, which released a follow-up fake volume report in May 2019, Alameda thinks more crypto volume is real. For large exchanges like OKEx and Huobi, which were founded in China, Alameda estimates about 70% of their transactions are authentic. Bitwise is much more skeptical, as is the Blockchain Transparency Institute, which has estimated that more than 60% of Huobi’s volume is fake and more than 90% of OKEx’s volume is fabricated.
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Prime Factor Capital is the first crypto hedge fund approved as a full-scope alternative investment fund manager by the UK FCA. The firm will abide by European regulations under which the firm will be allowed to hold more than EUR 100 million in assets under management.
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Cuba’s Communist government said on Tuesday it was studying the potential use of cryptocurrency as part of a series of measures to boost its economy amid a deepening crisis exacerbated by U.S. sanctions.
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Fresh from the Financial Conduct Authority on Wednesday: a proposal to ban the sale, marketing and distribution of derivatives and exchange traded notes linked to “cryptoassets” for retail consumers.
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IBM, in partnership with four Australian financial services companies, has launched an eight-week pilot for a blockchain-powered platform designed to streamline bank guarantee process. Lygon is a blockchain-based platform that digitizes the issuance and management of bank guarantees in the retail property lease sector. Per the release, digitizing the process will reduce the risk of fraud, decrease potential of errors, as well as increase transparency and security.tags: Fintech Blockchain
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A brief outage Tuesday morning at 10:00AM Eastern took down a number of crypto information and trading sites including Coinbase and CoinMarketCap. The issues cleared up around 10:18AM and most sites seem to be running again.