Telegram Abandons TON Blockchain Project After Court Fight With SEC
Telegram has given up on its upcoming Telegram Open Network blockchain network, following a lengthy, protracted dispute with the SEC. Since October 2019, the SEC has alleged that Telegram’s $1.7 billion ICO in 2018 for the Grams crypto-asset that powers the network, constituted an illegal securities sale.

Mauritius Central Banker Confirms Island’s Digital Currency Plans
Governor Harvesh Seegolam said the Bank of Mauritius would be embarking on a CBDC pilot in the near future. Seegolam said it would have to be distributed through the established banking system, even if the central bank issues the actual currency, to avoid the risk of destabilizing the island’s financial system. (See also: https://www.bom.mu/media/speeches/shaping-new-banking-landscape)

Bank of England: No Compromise on Our Principles for Any Future CBDC
Wise words from the BoE’s Simon Scorer: “We’re clear that any choice of technology around a CBDC should be led by a set of requirements and not the other way around… We would not let the choice of technology dictate the design; instead, what we would do is decide what functionality the CBDC requires, what our design principles are, and then we would choose what technology is most appropriate.”

Stablecoin Heatmaps Show Tether is Mostly Used During Asian and European Market Hours
Stablecoin transfer patterns show that different stablecoins are potentially being used for different purposes, and are favored in different parts of the world. USDT-ETH transfers are concentrated during Asian and European market hours. USDC transfers are also clustered during Asian market hours, but not as densely packed as USDT-ETH. PAX transfers are more dispersed, which could signal that it is being used for non-institutional purposes. And DAI transfers mostly occur during U.S. hours.

IBM Blockchain to Offer Decentralized Smart Contract Option
IBM is upgrading its enterprise Blockchain Platform to carry over changes in Hyperledger Fabric 2.0 (its base layer) that will improve performance and data privacy, and allow transaction parties to propose and amend smart contract parameters. https://www.ibm.com/blogs/blockchain/2020/05/ibm-blockchain-platform-is-full-steam-ahead-with-hyperledger-fabric-2-0-red-hat-integrations/

UAE Bank Opens Bangladesh Remittance Corridor using Ripple’s Blockchain Tech
UAE-based RAKBank is expanding its remittance routes using RippleNet blockchain technology. RAKBank and Bangladesh-based Bank Asia have partnered to allow users to transfer money between accounts at the two institutions within 24 hours. The announcement doesn’t specify whether the service utilizes XRP, which is an option for RippleNet users.

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Bitcoin Halving Arrives: Mining Rewards Drop for Third Time in History
Miners racing on the network to compete for freshly minted bitcoin produced the 630,000th block at 19:23 UTC on May 11, which triggered the programmed halving event, marking another milestone in the currency’s 11-year history. The first block in the new 6.25-bitcoin-per-block mining cycle was mined and relayed by China-based Antpool, the fourth-largest mining pool.

European Central Bank steps up focus on retail CBDC
The European Central Bank is stepping up its analytical investigations into the potential for creating a central-bank backed digital currency for retail customers, a move which would be “a game changer” for the banking industry, says the ECB’s Yves Mersch.

Game-Changer Retail CBDC Now European Central Bank’s Focus, Board Member Says
The ECB set up a task force earlier this year to look into what its potential CBDC could look like, and the group expects to publish a preliminary report in the coming weeks, said the ECB’s Mersch. He spoke during CoinDesk’s Consensus: Distributed conference Monday on central banks and their approach to the digital currency.

Leaders of the Digital Dollar Project Talk Privacy and the Next Century of Money
The Digital Dollar Project’s Chris Giancarlo alluded to concerns over China’s human rights abuses and its planned digital renminbi: “If the US dollar can actually offer features of privacy that other sovereign currencies might not, this would further strengthen the role of the dollar.”

Overview of Central Bank Digital Currency – State of Play
This SUERF note provides an overview of the state of play regarding the development of central bank digital currencies across the world. It describes the leading central banks current initiatives and outlines the main aims and design features of their CBDC projects.

Bitcoin stabilizes after yesterday’s flash crash—but for how long?
On May 9 the price of Bitcoin fell from around $9,800 to lows of $8,518 and Coinbase went offline as whales unloaded their Bitcoin onto the market. According to CryptoDiffer, a total of $1.22 billion was liquidated from exchanges. $368.13 million was wiped from Huobi; $284.82 million from BitMEX; $282.20 million from OKEX; $280.96 million from Binance; and $1.5 million from FTX.

The Security Trilemma and the Future of Bitcoin
This article argues that, over time, the programmed reduction of Bitcoin’s block subsidy will make it more vulnerable to 51% attacks. Once the subsidy shrinks beyond a certain point, Bitcoin will either become more centralized (i.e. rely on institutions to function), or its liquidity could dry up, or its supply needs to grow beyond the originally envisioned 21 million coins.

Why COVID-19 makes a compelling case for the wider integration of blockchain
The COVID-19 crisis has revealed a general lack of connectivity and data exchange built into our global supply chains. Future resiliency will depend on building transparent, inter-operable and connective networks. Hence, the World Economic Forum, in association with its international blockchain community, co-developed the Redesigning Trust: Blockchain Deployment Toolkit, with a supply chain focus.

JP Koning on Why Fedcoin
A CBDC could be designed so that anyone can get as much anonymous money as they want. But they’d have to pay for this privilege. One way is by charging a hourly fee, or a negative interest rate, on anonymous balances or set a large withdrawal fee, say 5% for anomymity. These revenues might be used by the government to to bolster the budgets of fraud departments, or to compensate victims of ransomware. But an anonymity tax puts regular people and criminals into the same bucket and it subtly ostracizes licit users of anonymous CBDC.

Without privacy, do we really want a digital dollar?
If governments do decide to develop a publicly-run digital alternative to existing bank-mediated payments and physical cash, then technologies pioneered in the cryptocurrency space should deliver scale and accountability while preserving much of the privacy and freedom inherent in cash transactions, privacy and freedom that are essential to a free and democratic society.

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Sudden Bitcoin Crash Sparks Serious Coinbase Warning
Crypto-asset prices crashed during a 7 minute period on May 9 when whales unloaded bitcoin, which was down 15% at one point (from about $10,000 to $8,500). During the plummet, Coinbase went down again as well, but service was restored within an hour. Data from Skew shows that over $200 million worth of overleveraged BitMEX long positions were liquidated during the plummet, the largest bout of liquidations since the March 12 crash that sent Bitcoin from $7,700 to $3,700 within a 24 hour span. Coinbase experienced an outtage during the March plummet, and again at the end of March as crypto-asset prices spiked up.

The Internet Is A Public Permissioned Network. Should Blockchains Be The Same?
At the heart of the design of the public Internet, is a hidden system of governance and ‘permissioning’ that makes it all work. The Internet is a public network with permissioning of some key resources. And the lessons we can learn from this have profound implications for the future of blockchain systems, especially in the enterprise. Open, shared, general purpose, broad access networks – public networks – tend to dominate over time. But public does not imply anarchic or permissionlessness. This article makes the case that public blockchains that take a similar approach to the internet are the ones to watch, like Corda Network, Alastria and Sovrin.

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New Zealand’s Central Bank Is Hiring a Money Futurist
The Reserve Bank of New Zealand is looking for a “Head of Money and Cash” that will be “focused on the future of money.” The new role will be a digital currency specialist who can speak to trends reshaping financial infrastructure – “online payments and digital currencies” – and provide “thought leadership around the future of cash and money.”

New regulation on open banking in Brazil
The newly issued Banco Central do Brasil open banking regulation enables the sharing of customer registration and transactional data at the customer’s discretion, in a safe, swift and convenient environment.

Paul Tudor Jones Buys Bitcoin as a Hedge Against Inflation
Macro investor Paul Tudor Jones is buying Bitcoin as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s. Jones’ Tudor BVI Global Fund has been authorized to hold as much as “a low single-digit percentage exposure percentage” of its assets in bitcoin futures, according to a note sent to investors. The firm manages $38 billion, of which $22 billion is in the flagship BVI fund.

Telegram Agrees to Hand Over Trove of ICO Documents to SEC
Telegram has filed an order of consent agreeing to provide a trove of communications and documentation requested by the U.S. SEC on May 7. The communications concern the distribution of Telegram’s Gram tokens and purchase agreements relating to its 2018 ICO. Telegram’s consent comes amid the Free Telegram Open Network community’s decision to launch a version of the TON blockchain via a ‘fork’.

Search Interest in Bitcoin’s Halving Reaches Fever Pitch as Price Hits $10K
Google Trends, a barometer for gauging interest in trending search topics, shows searches for “halving” or “bitcoin halving” at five times the peak in 2016, when the blockchain underwent its previous halving event.

Cambridge Bitcoin Electricity Consumption Index Bitcoin Mining Map
The Bitcoin Mining Map visualises the approximate geographic distribution of global Bitcoin hashrate. The average hashrate share by country is available for display in monthly intervals starting from September 2019. In addition, a second map with an exclusive focus on China’s hashrate distribution by province is provided.

98% of XRP transactions are empty, says report
The analysis in this paper reveals that only a small fraction of EOS, Tezos and XRP transactions are used for value transfer purposes. In particular, 95% of the transactions on EOS were triggered by the airdrop of a currently valueless token; on Tezos, 82% of throughput was used for maintaining consensus; and only 2% of transactions on the XRP ledger lead to value transfers.

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The Central Bank Digital Currency Survey 2020 – debunking some myths
According to the results of Central Banking’s inaugural CBDC survey very few central banks plan to issue CBDCs, in any form, within the next five years. Moreover, much-vaunted blockchain technology is viewed as having limited applications – despite the Libra Association sticking with a version using Byzantine algorithms. And the idea of a decentralised currency is a non-starter – centralised controls are essential from a public-sector perspective.

How digital payments can help countries cope with pandemics: lessons from China
Digital payments allow people to access goods and services while in quarantine or social distancing. SARS epidemic in 2003 expedited China’s path in launching digital payments and e-commerce in the country. A robust identification system, widespread, consistent internet access and trustworthy ways to get money into digital formats could be important for digital payments to thrive.

Bison Trails Announces Support for Celo Platform
Bison Trails has announced support for the Celo open network, which enables smartphone users to send crypto directly to a phone number instead of a blockchain address. The added support means that users will be able to transfer value using Celo’s stablecoin pegged to the U.S. dollar on the Bison Trails platform. The Celo tech system has three layers: Celo Blockchain, Celo Core Contracts, and Application, and uses Earned Value Management and the Go-Ethereum protocol for their underlying node system.

What Stellar’s Investment In Abra Means For The ‘Robinhood Of Cryptocurrency’
The Stellar Development Foundation, a non-profit organization that supports the development and growth of the Stellar blockchain network announced a $5m investment in Abra, a leading cryptocurrency wallet and exchange application, as part of an overall strategic partnership between the two organizations.

Standard to Deal With FATF Travel Rule
The Joint Working Group for InterVASP Messaging Standards IVMS101 standard defines a uniform model for data that must be exchanged by virtual asset service providers alongside crypto-asset transactions. The standard will identify the pseudonymous senders and receivers of crypto payments, with such information “traveling” with each transaction.

Impossible Finance — The Cryptocurrency Bridging Currency
Many firms have tried to build international payments businesses based on the concept of transferring funds using crypto-assets as a bridging currency. The crypto-asset route is potentially cheaper for a payments provider because it cuts out the necessity of holding foreign currency balances. Progress by firms using the model has been limited, possibly because this logic does not factor in the costs of additional currency exchanges and liquidity provision.

New Report Explains Why XRP Takes Weekends Off
In its Flipside Crypto “4 Things To Know About XRP Money Flows”, Flipside Crypto analyzes the flows of XRP through the ecosystem and notes that activity for XRP drops significantly on the weekend. It theorizes that this is likely due to a lack of consumer or retail interest in the asset.

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Google and Gates Foundation to help spread digital payments in developing countries
The Bill and Melinda Gates Foundation have formed the Mojaloop Foundation to develop and promote a free, open-source real-time payments platform for nations and central banks. The Mojaloop software includes a directory for identifying account holders, a transfer system for routing payments, and a clearing and settlement layer that transfers funds among users’ financial institutions. The routing system relies partly on Interledger technology originally developed by Ripple. Mojaloop-based systems are hosted by each country’s authorities, but because they use a shared standard, they could eventually become interoperable across borders. https://mojaloop.io/

Libra Association Names HSBC Chief Legal Officer as First CEO
The Libra Association has named HSBC Chief Legal Officer Stuart Levey as its first chief executive. He has been at HSBC since 2012 and previously served the U.S. government as Under Secretary of the Treasury for Terrorism and Financial Intelligence under the presidencies of George W. Bush and Barack Obama, and has a background in combating illicit finance.

Alliance for Prosperity: 75 Members Strong & First Integrations Live
There are now 75 members in Celo’s “Alliance for Prosperity” stablecoin payments network ahead of its mid-May mainet launch. Celo is a mobile-first blockchain-based platform alongside a suite of financial tools accessible to anyone with a basic smartphone. The stability protocol can host an ecology of stable value currencies like the Celo Dollar, regional currencies, and commodity prices.  https://medium.com/celoorg/an-introductory-guide-to-celo-b185c62d3067

Stablecoins as a collateral sinkhole
As the ECB noted in a recent stablecoin research piece in an extreme-case scenario where libra coins prove as popular as Facebook, the global size of the Libra Reserve could reach almost €3tn of assets under management! In that context it’s fair to say the Libra Reserve’s potentially endless demand for safe assets could swiftly transform it into a self-consuming Ouroboros. Especially in the current crisis environment.

Bitfinex Derivatives Launches Bitcoin Dominance Perpetual Swaps
Crypto exchange Bitfinex is launching a perpetual swap that enables traders to speculate on Bitcoin dominance. Dominance refers to Bitcoin’s share of the total market capitalization for all crypto-assets.

Dutch Central Bank to Crypto Firms: Register in 2 Weeks or Shut Down
De Nederlandsche Bank is moving to quickly enforce enhanced Dutch anti-money laundering laws, which passed the Dutch Parliament in April 2020 to comply with the European Union’s AML directives and standards set by the Financial Action Task Force. Dutch crypto companies must register with the DNB by May 18 or cease operations immediately. https://www.dnb.nl/nieuws/dnb-nieuwsbrieven/nieuwsbrief-cryptodienstverleners/nieuwsbrief-aanbieders-van-cryptodiensten-mei-2020/index.jsp

The Five Hidden Principles in Staking and Validating
As the Ethereum community anticipates the long-awaited launch of Ethereum 2.0, users are also bracing themselves for a major systematic shift from a proof-of-work model to a proof-of-stake. PoS systems consume exponentially less power and systematically increase decentralization by lowering the barrier of entry to network participation. While the transition from PoW to PoS may be initially difficult for the community, this article proposes five principles to make the transition easier for everyone.

Open banking review faces ‘worrying’ delay as pandemic drives Canadians to fintech
The coronavirus pandemic has thrown a wrench into the Canadian government review of open banking, causing concern that the delay could further wound financial-technology companies, while leaving scores of Canadian consumers sharing their financial data in potentially risky ways.

What We Can Learn From Telegram’s Token Troubles
Will Telegram be able to retain funds sufficient to fight the SEC, maintain its ever-growing messenger, continue developing the blockchain and potentially fight additional legal claims from some of its investors? The significant portion of the remaining $1.2 billion would need to be retained to make it happen.

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China’s digital yuan gets ready for prime time
Sonja Davidovic (@sonjadav) and I discussed with Chris Brummer (@ChrisBrummerDr) the latest Chinese central bank digital currency (CBDC) developments, and how the heavily rumored upcoming pilot compares to what we know about other CBDC pilots around the world.

A regulatory and financial stability perspective on global stablecoins
This ECB article focuses on the global stablecoin asset management functions, assessing their regulatory and financial stability implications. It argues that regulatory gaps may exist with certain design features, and concludes that the malfunctioning of that function could pose risks to financial stability given its potential size and interlinkages with the financial system. Also, a robust regulatory framework needs to be put in place in order to address these risks before such arrangements are allowed to operate.

Launch of the OMFIF Digital Monetary Institute
The Official Monetary and Financial Institutions Forum (OMFIF) has launched the Digital Monetary Institute, a high-level group of policy-makers, technologists, financiers and regulators to explore the challenges and opportunities of digital finance. The principal focus will be on payments instruments in wholesale and retail markets, with central bank digital currency being of particular interest.

Telegram Decides to Immediately Buyout US-Based Gram Investors
Telegram is now forcing the U.S.-based Gram token investors to take the 72% refund and exit the TON blockchain project. The encrypted messaging platform has also retracted last week’s offer to pay investors in Gram tokens at all. These moves were based on the scheme’s uncertain reception from the U.S. regulators.

Ripple hit with yet another XRP class-action lawsuit
A new class-action lawsuit has been filed against crypto giant Ripple and its CEO Brad Garlinghouse alleging securities laws violations regarding the sale and marketing of XRP. The lawsuit alleges that Ripple created the XRP cryptocurrency for the sole purpose of making its founders and a few other people rich.

Ripple paid $16.6 million in XRP incentives to MoneyGram in Q1 2020
Ripple has paid MoneyGram $16.6 million of incentives in Q1 2020 for using its RippleNet solution. MoneyGram categorizes these payouts as a “contra expense rather than revenue” and as a “market development fee based on the volume of foreign exchange that we transact on Ripple’s platform.”

OCC Deal To Move $72 Billion In Equities To Axcore Blockchain
The Options Clearing Corporation that helps BATS, Cboe, Nasdaq NDAQ and the NYSE clear equity derivatives is now in the process of moving its currently $72 billion stock lending infrastructure to to Axoni’s Axcore blockchain. Each participant in a deal will run their own nodes, giving them real-time direct access to the same pool of data, instead of relying on a series of time-consuming messages.

When the banks closed in Wuhan, nobody cared
When asked last month about the impact of the closure of banks, many Wuhan residents said that they had not noticed or that they had little interaction with their banks to begin with.

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$10 billion stablecoin boom as Bitcoin halving nears
Anticipation of Bitcoin’s halving could be driving the issuance of stablecoins. A record $3 billion of stablecoins were deposited on exchanges this year. Stablecoins are increasingly being used to enable Asian trade finance. Businesses in Malaysia and Indonesia, for example, are using stablecoins to pay their suppliers in China, transferring funds via ETH wallets. But stablecoins are still mainly used for crypto trading and enabling capital flight out of China.

The Stablecoin Surge Is Built on Smoke and Mirrors
U.S. stablecoin reserves may not be fully protected by FDIC insurance. And if they aren’t, then stablecoins may actually be less secure than ordinary bank deposit accounts. If people really are investing in stablecoins because they think they are safer than bank deposit accounts, I’m afraid they have allowed the smoke to get in their eyes and the mirrors to blind them.

Palestine Monetary Authority on Electronic Payment Services in Palestine
The Palestine Monetary Authority (PMA) issued instructions for PMA-licensed payment service providers to operate and provide electronic payment services. This will be done through authorized agents of these companies spread across the governorates, cities and villages of the country. Any citizen can benefit from the services provided by payment services companies without requiring a bank account.

Brazil’s central bank to implent open banking in November
Banco Central do Brasil will start implementing open banking rules in November. Under the rules, banks will share customers’ data with third parties that can use the information to offer consumers products, in a move expected to spur competition in Brazil’s highly concentrated banking market. It is expected to be fully implemented by October 2021.

Revolut launches licenced bank in Lithuania
U.K.-based Lithuanian-licensed digital bank Revolut has launched as a fully-licenced bank in Lithuania. Existing customers are able to upgrade from e-money accounts to bank deposit accounts from their Revolut app.

South Sudan mobile money operator launches remittance service
South Sudan’s mobile money service, m–Gurush, has launched an international remittance service. The service will be particularly beneficial to the South Sudanese living in East Africa who will now be able to receive money using the existing mobile money services such as M-Pesa in Kenya and MTN Mobile Money in Uganda.

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Why are Central Banks Interested in Digital Currency?
With a decrease in the use of cash, the objectives pursued by the Central Banks with an electronic and universally accessible form of money are to anticipate the disappearance of cash, create an efficient and cheap means of payment, and strengthen regulatory controls. It is not a matter of “if” but a matter of “when”. Central Banks must define the objectives first, then get the design parameters right while carefully assessing the second order effects; and conduct thorough pilots before launching a central bank digital currency.

Bitcoin’s Third Halving Will Be Its Biggest Test Yet
Bitcoin holders, developers, users, investors, and speculators are poised for the third Bitcoin Halving, slated for May 12th. The event will cut miner block rewards in half from 12.5 to 6.25 BTC, with new coins added to the network every 10 minutes. The annual inflation rate will be reduced from ~3.64% to ~1.8%, a notable milestone as it declines below the Fed’s inflation target of 2% per year.

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