Archive for Category: News

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  • HSBC Exec at Money20/20: Blockchain, CBDCs Pose ‘Great Challenge’ to Interbank Settlement

    HSBC Exec at Money20/20: Blockchain, CBDCs Pose ‘Great Challenge’ to Interbank Settlement

    A senior executive from U.K.-based bank HSBC has said that time-efficient distributed ledger technologies (DLT) and central bank digital currencies (CBDCs) represent a “great challenge” to existing real-time gross settlement (RTGS) systems, Cointelegraph learned at the Money20/20 conference Oct. 23.

    HSBC’s Global Innovation Lead for Global Liquidity & Cash Management, Craig Ramsey, made his remarks during a panel during the Money20/20 conference in Las Vegas yesterday, which was devoted to “Digital Opportunities for Cross-Border Inter-Bank Transactions.”

    When asked by moderator Robert Ruark — principal at financial services at “big four” audit firm KPMG — about which technologies HSBC is currently looking into for RGTS, Ramsey responded at first by suggesting the bank was looking at incumbent mechanisms, referring to SWIFT global payments solution, “SWIFT GPI”:

    “All the incremental changes that SWIFT are doing [were] one of the things that we considered [...] they issued some statistics in May 2018 that using SWIFT GPI technology, 43 percent of those transactions were settled in 30 minutes, 90 percent [...] were in under 24 hours.”

    Ramsay continued to say that “one of the things” being looked at in bank working groups is whether corporations really need transaction settlement in real time, or whether 30 minutes is sufficient. “Because if it is, then that suggests we can actually get quite a long way … with just using [existing] technologies,” he said.

    As he developed his argument, Ramsay then made an apparent about-turn, saying that given that “the technology we have across [existing] RTGS systems needs to be replaced,” the idea of central bank issued digital currencies and distributed ledger productively “challenges [banks’] frame of reference.”

    Ramsay also noted that this is a “great time” to pursue new possibilities on “behalf of corporates [… ]and in connection with regulators,” adding:

    “It doesn’t need to happen in the next six-nine months [...] and it’s too early to say which would win — it’s about the transition and dialogue that will create the ecosystem [...] for corporates to allow them to do what they need to do.”

    At Money20/20 earlier this week, experts disagreed on whether DLT such as blockchain will have benefits for payments systems more broadly. Ripple’s CTO David Schwartz argued from a retail perspective that “th[ose] companies that can provide those high-speed low-cost payments [using blockchain] will get the business, and those that don’t will have to adapt or die, just like in any technological revolution.”

    Also at Money20/20, Dash CEO Ryan Taylor noted that he thinks CBDC’s are “inevitable,” but clarified that it will be people who “will decide what form of money they want to consume and use as part of their lives.”

    This summer, HSBC’s compatriot, the U.K.’s central Bank of England, revealed plans to rebuild its RTGS system so that it can interface with private business and platforms using DLT.

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  • Chinese Consortium Led by Huawei and Tencent to Launch Coinless Blockchain

    Chinese Consortium Led by Huawei and Tencent to Launch Coinless Blockchain

    The Chinese Financial Blockchain Shenzhen Consortium (FISCO), led by multinational telecommunication company Huawei and tech giant Tencent, will soon present its coinless blockchain FISCO BCOS, as revealed in a press release Tuesday, Oct. 18.

    FISCO consists of more than 100 financial entities including major players such as WeBank, a digital bank initiated by Tencent, and Shenzhen Securities Communication. The consortium is going to present the new platform at the Singapore Fintech Festival, which will take place from Nov. 12-14.

    FISCO BCOS is described as a set of applications aimed to serve the general public. Per the release, the main strength of the new platform lies in the speed of transactions per second (TPS), which is expected to reach more than 1000. FISCO also claims its blockchain will use Byzantine fault tolerance protocol and also support Zero-knowledge proof.

    The consortium stresses that the blockchain network will also contain “observatory” nodes through which regulators and auditors would be able to monitor or access data whenever needed.

    Huawei has previously worked on decentralized projects in collaboration with Hyperledger — an open source blockchain operation created by the Linux Foundation in 2015.

    In March, Hyperledger launched its Caliper service — a blockchain benchmark tool allowing users to measure the performance of a specific blockchain implementation, with development contribution from Huawei. In April, Huawei released its Blockchain-as-a-Service (BaaS) tool, based on the Hyperledger blockchain, that could help developers create and deploy services on Huawei Cloud.

    Also this spring, Huawei announced the users of its mobile phone will be able to download Bitcoin (BTC) wallets on their devices, with the wallets set to be pre-installed on all new Huawei smartphones.

    Tencent has previously participated in the blockchain space as well. In June, the tech giant partnered with Chinese officials to create the China Blockchain Security Alliance, which will consist of more than 20 public and private institutions — including government advisory agencies — and will develop secure mechanisms to deploy blockchain all over the country.

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  • Dash CEO Ryan Taylor: Central Bank-Issued Cryptocurrencies Are the ‘Inevitable Future’

    Dash CEO Ryan Taylor: Central Bank-Issued Cryptocurrencies Are the ‘Inevitable Future’

    The CEO of Dash Core Group, Ryan Taylor, told Cointelegraph in an interview Oct. 23 that  central bank-issued cryptocurrencies are the “inevitable future,” but it will be people who “will decide what form of money they want to consume and use as part of their lives.”

    Speaking with CT during the Money20/20 conference, Taylor stated that central banks have certain advantages in issuing their own cryptocurrencies, but questions remain as to what form will it take and how the market will react. Taylor noted that the “free market can ultimately design the better money than the government,” underlining:

    “I do think it’s inevitable. They [governments] all are going —  through either competitors’ pressure or through their own desires — to launch their own cryptocurrencies. But I don’t think it is where the greatest innovations will occur.”

    Taylor also said that governments globally would start to regulate the crypto space very soon, and that “the smaller nations will move first as the risks [for them] are lower.” As well, Dash’s CEO made the prediction that the U.S. government will regulate the industry beginning as soon as next year.

    In July, Cointelegraph also spoke with Ryan Taylor about the security of cryptocurrencies and the possibility for their categorization as securities.

    In Tuesday’s interview, as a response to recent claims from Ethereum (ETH) core developer Joey Zhou, who called out Petro, the Venezuelan state-owned cryptocurrency, in plagiarizing parts of its white paper from Dash, Taylor said that it was not surprising, noting:

    “It is an open source code and using the word ‘plagiarize’ is quite difficult to apply, [but] there are significant portions they have copied.”

    Earlier this week, an executive from the Bank of Japan stated that central bank-issued digital currencies are not a practical economic tool, because they would require the elimination of fiat money from the financial system in order to be effective.

    In July, however, an E.U. parliamentary study found that central bank-issued digital currencies could be a “remedy” for the current lack of competition in the crypto space.

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  • Largest Chinese Newspaper to Launch Blockchain Lab After New Deal With Tech Company

    Largest Chinese Newspaper to Launch Blockchain Lab After New Deal With Tech Company

    The venture capital wing of the official newspaper of the Communist Party of China (CCP) — People’s Daily Online — has signed a deal for a strategic partnership on a blockchain laboratory Oct. 23, according to a press release.

    People’s Capital signed a deal with Shenzhen-based technology company Xunlei Limited. Per the terms of the agreement, the two companies will construct a laboratory for “technology innovation” at the People Capital’s Blockchain Research Institute.

    In addition to researching blockchain application in various use cases, the partners will also build a “high-level industrial service platform” to organize competitions, seminars, workshops, and promote and identify startups in the blockchain industry.

    According to the press release, the blockchain laboratory is part of an initial global partnership agreement signed by People’s Daily Online and Xunlei Limited on July 22 of this year.

    The People’s Daily Online is the online version of the People’s Daily, which was founded in 1948. Since the publication’s inception, the People’s Daily has been directly controlled by the top leadership of the CCP.

    In 2012, the online version went public on the Shanghai Stock Exchange, becoming the first news website in the country to be listed on the A-share market. The publication is widely regarded as a mouthpiece for government policies and positions.

    Xunlei Limited is a blockchain infrastructure provider and is also known as the “BitTorrent of China” for developing the Xunlei download manager, a peer-to-peer software that supports HTTP, FTP, and BitTorrent protocols.

    Earlier this year, the CCP published a primer on blockchain technology and its possible applications. Ye Zhenzhen, general manager of the People's Daily then stated that the most important part of blockchain technology is its “operating mechanism.” He added, “Through the ingenious combination of technologies, the fair distribution of resources is completed.”

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  • Coinbase and Circle Launch USDC Stablecoin With Purported Full Backing in US Dollars

    Coinbase and Circle Launch USDC Stablecoin With Purported Full Backing in US Dollars

    Major U.S. cryptocurrency exchange Coinbase has launched the USD Coin stablecoin (USDC), making it the first stablecoin for trade on the platform, Cointelegraph learned at the Money 20/20 conference Oct. 23. The underlying technology behind USDC was developed collaboratively between Coinbase and blockchain-powered payments technology company Circle.

    Coinbase customers in supported jurisdictions can now purchase, sell, send, and receive USDC at and the exchange’s iOS and Android apps. Coinbase notes in the statement that its U.S.-based customers outside the state of New York are able to buy and sell, while customers around the world can send and receive the coin.

    Coinbase states that USDC will be coming to Coinbase Pro in the coming weeks and is already supported on Coinbase Wallet, with more jurisdictions to become available in the future. The coin is purportedly 100 percent collateralized with U.S. dollars, which are held in accounts that are subject to public reporting of reserves. At the Money 20/20 conference in Las Vegas, Coinbase President and COO Asiff Hirji said:

    “We are issuing stablecoins backed 1:1 with the U.S. dollar, completely audited, completely transparent. We think this is a key step toward unlocking innovation in crypto.”  

    A stablecoin is a digital currency tied to another stable currency like the U.S. dollar, and is designed to minimize price volatility. The value of a stablecoin is based on the value of the backing fiat currency, which is held by a third party regulated financial entity.

    Earlier this month, another stablecoin Tether (USDT) found itself at the source of controversy after volatility caused it to lose its long-time peg to the U.S. dollar. At the time, USDT traded around $0.975, at one point dropping as low as $0.91. The problems arose amid rumors that crypto exchange Bitfinex, the CEO of which is also CEO of Tether,  was facing insolvency.

    Following the news, cryptocurrency investor and entrepreneur Michael Novogratz said that USDT should create more “transparency” about its operations. Novogratz said that he thinks “Tether didn’t do a great job in terms of creating transparency," while also noting that “the concept of stablecoins makes sense.”

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  • Coinbase Gets Approval to Offer Crypto Custody Services in the State of New York

    Coinbase Gets Approval to Offer Crypto Custody Services in the State of New York

    New York state regulators have approved Coinbase Custody Trust Company LLC to roll out their cryptocurrency custody services in the state, according to an official announcement published Oct. 23.

    The New York State Department of Financial Services (DFS) has authorized Coinbase’s wholly-owned subsidiary Coinbase Custody Trust Company LLC to provide a limited range of custody services for virtual currencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Ripple (XRP) and Litecoin (LTC).

    Commenting on the approval, Asiff Hirji, President and COO of Coinbase, stated that “since 2014, the New York Department of Financial Services has proven itself to be a strong advocate in its support for the responsible growth of the cryptocurrency industry.” Hirji further added:

    “The New York State Limited Purpose Trust charter, which now enables Coinbase Custody to act as a Qualified Custodian for crypto assets, builds on our unparalleled success as a crypto custodian while holding the company to the same exacting fiduciary standards and oversight of other, mature financial institutions operating in New York.”

    Coinbase launched its custody services ‘Coinbase Custody’ in July, focusing on institutional customers and optimized to store large amounts of digital currency. The product purportedly utilizes a range of security measures, including “on-chain segregation of crypto assets,” “offline, multi-sig and geographically distributed transaction protection” and “robust cold storage auditing and reporting.”

    Coinbase Custody also uses systems from SEC-registered broker-dealer and FINRA-member Electronic Transaction Clearing (ETC). In August, Coinbase announced plans to add 40 new assets to its custodian service. The crypto assets in question, however, may be added “for storage only,” as Coinbase is not currently considering the assets for trading.

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  • New York Judge Dismisses Case Against Nano Developers

    New York Judge Dismisses Case Against Nano Developers

    A New York judge has thrown out an investor’s proposed class action lawsuit against the  development team of altcoin Nano (XRB), according to court documents filed Oct. 22. The lawsuit accused the devs of luring him to trade the coin on a platform that lost hundreds of millions of dollars’ worth of the cryptocurrency.

    Initially, the lawsuit was filed in April by an American individual, Alex Brola, who reportedly bought $50,000 worth of XRB on Dec. 10, 2017, through Silver Miller law firm. The suit accused Nano’s core team of violating U.S. securities laws by selling unregistered securities and negligently misrepresenting the reliability of Italian crypto exchange BitGrail, from which around 17 million XRB ($187 million at the time) was stolen in February.

    In the lawsuit, Brola asked that Nano be ordered to “rescue fork” the investors’ missing XRB “into a new cryptocurrency in a manner that would fairly compensate the class of victims.” Although Brola is the named plaintiff in the lawsuit, the complaint claimed there are “at least hundreds if not thousands of putative Class members,” that Silver Miller planned to contact during the discovery period.

    U.S. District Judge Nina Gershon dismissed the case about a month after Brola voluntarily withdrew the suit. While the notice of dismissal does not state why the suit was dropped, the lead defense counsel Peters Scoolidge reportedly told legal news site Law 360 that “the plaintiff withdrew the complaint because the case lacked merit.”

    Prior to Brola’s decision to withdraw the lawsuit, the defendants urged the New York federal court to dismiss the suit, claiming that the tokens are not securities and therefore are not subject to securities laws.

    In a motion to dismiss filed in September, the XRB team stated that the cryptocurrency can not be classified as a security because the company had never gained any money in exchange for its insurance and has no investors. “Nano’s value does not derive from a group of managers or executives managing other people’s property; rather, Nano’s value is derived from its utility or potential utility as a currency,” the document further states.

    Following the hack, both BitGrail and Nano have accused the other of being responsible for the $187 million theft of XRB tokens. BitGrail CEO Francesco Firano told Cointelegraph that “it’s impossible to refund the stolen amount.”

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  • Financial Giant SBI Group to Develop Wallet Following New Partnership

    Financial Giant SBI Group to Develop Wallet Following New Partnership

    Japan-based financial services firm SBI Group and Danish cryptography services company Sepior ApS have partnered to jointly develop a proprietary wallet, according to an announcement published Oct. 13. The wallet is set to ensure secure transactions on SBI’s cryptocurrencies exchange platform, VCTRADE.

    The SBI Group was established in 1999 in Japan as an Internet-based financial services provider. Since then, the company has formed a financial conglomerate with a focus on new technologies, including fintech, Internet of Things (IoT), artificial intelligence (AI), and others. In 2018, SBI reportedly invested over $533 million in the blockchain and AI sectors.

    Per the press release, Sepior and SBI have signed an agreement to license Sepior’s Threshold-Sig Wallet Security technology and to jointly develop a proprietary wallet to secure online content and transactions on SBI’s digital currencies trading platform, VCTRADE.

    With this move, SBI is reportedly looking to set new standards for crypto exchange security, partly through the development of more effective key management and protection. Sepior’s patented Threshold Wallet technology reportedly allows faster signing of transactions involving multiple parties and “eliminates the need for any device or entity to possess the entire private key at any time, making it effectively impossible for an attack to result in key theft.”

    Yoshitaka Kitao, Representative Director, President and CEO of SBI Holdings commented on the technology:

    “After extensive investigation, our security research team determined threshold signatures based on multiparty computation (MPC) offered our desired level of security, performance, and scalability needed to manage transactions for our growing SBI Virtual Currencies customer base.”

    Earlier this month, Ripple-powered payments app MoneyTap went live. The service was co-developed by Ripple and SBI Holdings, and will use Ripple’s blockchain solution xCurrent to enable domestic bank-to-bank transfers “in real time.”

    In September, SBI Holdings began trialing a crypto token “S Coin,” that can be used to make retail purchases with users’ smartphones. In the trial, SBI Group employees will reportedly use the S Coin platform to complete cash-free purchases at cafes and eateries around the premises of the SBI headquarters.

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  • Crypto Markets See Mixed Signals, Mostly Trading Sideways

    Crypto Markets See Mixed Signals, Mostly Trading Sideways

    Tuesday, Oct. 23: crypto markets continue their sideways trend today, with total market cap slightly down over the past 24 hours, according to CoinMarketCap. The markets are seeing mixed signals as of press time, with most top coins trading sideways, up or down by less than one percent.

    Market visualization from Coin360

    Bitcoin (BTC) is up less than a tenth of a percent over the past 24 hours, and trading at $6,487.77 at press time. The major cryptocurrency have seen small volatility over the day, having dropped to as low as $6,454, while the intraday high reached $6,506 as of press time. In terms of a weekly view, Bitcoin has dropped by around 1.7 percent, with the current price interval fluctuating at the same levels as on Oct. 19.

    Bitcoin 24 hour price chart. Source: CoinMarketCap Bitcoin Price Index

    Ethereum (ETH), the second top cryptocurrency by market cap, is up 2.95 percent over the 24 hour period, trading at $206 at press time. The major altcoin has seen its highest price point over the week on Oct. 16, amounting to $210, with a weekly low of $201.

    Ethereum 24 hour price chart. Source: CoinMarketCap Ethereum Price Index

    Ripple (XRP), the third top cryptocurrency by market cap, has suffered slight losses over the day. The coin is down 0.52 percent over the 24 hour period. Trading at $0.453 in the beginning of the day, XRP is now trading at $0.46 at press time. The cryptocurrency is down almost 6 percent over the past week.

    Ripple 24 hour price chart. Source: CoinMarketCap Ripple Price Index

    Market capitalization reached a high point of $211 billion yesterday, amounting to $209 billion as of press time. Today market cap dropped to $207 billion, while yesterday’s intraday low was $208 billion. Over the week, total market cap has been relatively stable, with a high point of $212 billion.

    Daily trade volume has been hovering around $10 billion over the day, following the recent spike from $9 billion on Oct. 21. CoinMarketCap has delisted some cryptocurrencies, with the total number of coins dropping from 2,112 to the current 2,056.

    Total market capitalization weekly chart. Source: CoinMarketCap

    VeChain (VET), the 19th top coin by market cap, has seen the biggest gains over the past 24 hours among the top 20 cryptocurrencies. The altcoin is up 6.85 percent and trading at $0.011, which is still down around 0.62 percent over the past 7 days.

    Earlier today, the world’s largest crypto exchange Binance acquired investment from a subsidiary of Singapore-based government-owned investment firm Temasek Holdings. According to an official announcement, Binance exchange is launching crypto-fiat trading in Uganda tomorrow, with the first trading pairs BTC/Ugandan shillings (UGX), and ETH/UGX.

    Yesterday, the CEO of crypto investment app Circle, Jeremy Allaire, urged global economies to develop coordinated regulation of cryptocurrencies, stressing that there is a need to pay special attention to the regulation of Initial Coin Offerings (ICOs), as well as crypto market manipulation and know-your-customer (KYC) policies.

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  • SEC Publishes Memorandum From Meeting on SolidX, VanEck BTC ETF Proposal

    SEC Publishes Memorandum From Meeting on SolidX, VanEck BTC ETF Proposal

    The U.S. Securities and Exchange Commission (SEC) has published a memorandum, dated Oct. 9, from a meeting regarding the Bitcoin (BTC) exchange-traded-fund (ETF) proposal from VanEck and SolidX.

    As stated in the memorandum, VanEck is a New York-based investment management firm with $46 billion in assets under management and SolidX is a provider of blockchain software development and financial services.

    According to the document, on Oct. 9 SEC Commissioner Elad L. Roisman and his counsels Dean Conway, Matthew Estabrook, and Christina Thomas met with representatives from SolidX, VanEck, and the Chicago Board Options Exchange (CBOE).

    The memorandum presents a summary of the applicants’ history with the regulator. SolidX had filed for a Bitcoin ETF to be listed on the New York Stock Exchange (NYSE) as early as March 2016, but its application was rejected by the SEC in March 2017.  

    In June 2018, VanEck joined SolidX to apply for a physically-backed Bitcoin ETF to be listed on CBOE’s BZX Equities Exchange, the SEC’s decision on which is still pending since it was postponed in August.  

    The proposed pricing of each share of the physically-backed Bitcoin ETF is about $200,000 (25 bitcoin per share), in an explicit bid to focus on institutional, rather than retail investors.

    The parties’ arguments as outlined in the memorandum comprehensively address the grounds the regulator had given in its 2017 disapproval of SolidX’s previous ETF application: a perceived failure to be consistent with Section 6(b)(5) of the Securities Exchange Act, which focuses on “prevent[ing]  fraudulent and manipulative acts and practices.”

    The SEC at the time stated that, historically, commodity-trust exchange-traded products (ETPs) have been approved in the context of “well-established, significant, regulated markets for futures.”

    The memorandum counters this ground, stating that “multiple” Commodity Futures and Exchange Commission (CFTC)-regulated Bitcoin derivatives markets now exist for Bitcoin, notably on stalwart U.S. exchanges CBOE and CME.

    As reported in August, the SEC rejected nine applications to list and trade various Bitcoin ETFs from three different applicants, in part citing similar concerns over the lack of regulated derivatives markets of a sufficiently “significant” size.

    VanEck, SolidX and CBOE’s representatives argued against this latter point in their memorandum, stating:

    “As issuers, we are concerned the SEC staff have created a moving target in their use of the word ‘significant.’ The Staff have never provided guidance as to what "significant" means, enabling them to move the goal post indefinitely.”

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