Will China’s CBDC See Strong Adoption Or Will Dollar Pegged Stablecoins Cause Resistance?

China’s digital yuan is touted as a powerful challenger to the US’s global dollar dominance, but not as a direct competitor to cryptocurrencies. However, Chinese central bank digital currencies (CBDC) may find it hard to see adoption in niches where the dollar-pegged stablecoins already have a foothold, primarily Tether’s USDT.

Speaking during the Unitize panel held on Monday, Genesis Block’s Charles Yang, gave reasons why digital yuan might not be attractive as a crypto replacement.

Speaking to Bitcoin Exchange Guide, Yang explained that there are two main aspects driving crypto adoption in Asia. First, speculation, stating that there is a large number of investors particularly from China and Korea who like taking risks. In addition, Asian traders also enjoy the borderless nature of cryptos. He explained:

“Any country that has these capital constraints — Korea is a big one, China’s obviously another major one — [where] people just can’t go through regular banking channels to send money to a different country. This is the major use case of crypto right now.”

In this regard, Yang argues that a centralized as well as bank-issued digital yuan might not be a superb replacement to USDT. Yang states that the set regulations for capital control will still apply.

Yang also brought the issue of internationalization of CBDC’s and the way other nations may react. He explained that if China introduces a digital yuan within their own blockchain insisting other nations to accept it, those nations will need to access the data. Yang remains sceptical on whether the Chinese central bank will be ready to offer the data to other nations.

Yang stated that USDT will remain to be popular in Asia as lots of dollars are being traded each day. Traders’ confidence has been boosted in the recent past in regards to its reserves.

The expert opines that digital yuan will need to establish itself among bigger crypto markets as well as exchanges for it to compete with USDT.

Lack of adoption by other countries can also make it hard for the digital yuan to have a major threat to USDT.

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Author: Joseph Kibe

NEM-Based Blockchain Project Symbol Launches Wine Supply-Chain Management System

Symbol, an enterprise-focused blockchain project developed by NEM, is looking to tap into the Wine supply-chain business and help the industry save millions caused by tampering, theft, and counterfeiting every year.

Symbol would develop a blockchain-based supply chain management system to keep a check on the growing scale of fraud in the wine industry. The blockchain system is rumored to be quite capable and can process a large number of transactions every second.

Symbol’s system would keep track of every aspect, from the raw fruits being harvested on the grounds until the wine is made and delivered to the supermarket and retail shops. The blockchain would put extra emphasis on the privacy issues concerning buyers, sellers and distributors. To address this, another hybrid blockchain system will be integrated into the main blockchain.

The blockchain solution would implement smart contracts to counter tampering during transportation. The final payment settlement is complete, only if the delivered product meets all the quality and authenticity checks. The firm also explained the need for such a robust system and explained:

“This allows the producer or grower to engage in comprehensive blockchain-backed financial agreements, and make use of staggered payments using multi-signature accounts while being supported by a state of the art blockchain that can provide verification results in real-time.”

The NEM project is also planning to integrate a verification process for retailers as well as customers to ensure the end product being delivered to them is genuine.

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Author: James W

Kraken’s Crypto Facilities Becomes UK’s First FCA Approved Futures Exchange

Crypto Facilities which is also known as Kraken Futures has announced that it has received approval to start derivatives trading services mostly to institutional investors.

On Monday, the firm announced that it had received a Multilateral Trading Facility (MTF) license from UK’s financial watchdog, Financial Conduct Authority (FCA). According to the firm, the license will enable institutional investors to easily trade on the futures platform. The license means that the firm will enhance its clientele to investors that could have been barred by the UK laws from using unapproved exchanges.

In a statement shared with Bitcoin Exchange Guide, Kraken’s co-founder and CEO, Jesse Powell, explained that the firm has been pursuing the licensing as the firm is determined to ensure cryptocurrency is accessible to everyone. He stated,

“This particular license means that a sophisticated class of investors, limited by their own requirements to interface with a regulated venue such as an MTF, will now have access to crypto derivatives in Europe for the first time. More participants means more liquidity and a better experience for everyone.”

The firm also stated that the license makes Crypto Facilities the inaugural and the only approved derivatives company providing exposure to leveraged cryptos within the European Union.

Powell explained that sophisticated clients now have an opportunity to access crypto derivatives within the European Union which is a big step in the region.

Although the UK plans to exit the EU before the end of the year, the talks are not yet over and it remains unclear how regulatory issues will be handled after the exit. Majority of companies are hoping that passporting will be revoked.

The FCA had early this year warned against stern penalties on crypto derivatives platform BitMEX arguing that the company was luring UK customers even without its approval.

The Francisco-based Kraken bought out Crypto Facilities in February last year for an undisclosed amount which analysts estimated to be more than $100 million. At the moment the firm provides upto 50x leverage on various futures products such as Bitcoin, XRP, Bitcoin Cash, Ether and Litecoin.

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Author: Joseph Kibe

Binance to Supports Ontology Network 2.0 Upgrade Tomorrow; Swap NEP5 ONT Tokens Today

  • Binance is supporting the upcoming Ontology 2.0 network upgrade planned for Tuesday of this week.
  • The top crypto exchange stopped the deposits and withdrawals of ONT tokens on Monday, 9 AM GMT.
  • The ONT trading competition also came to a close with over $50,000 worth of ONT distributed.

In a press release on July 6, the Binance media team announced its support for the upcoming Ontology (ONT) major network upgrade slated for July 7, 2020. As such, deposits and withdrawals of ONT tokens on the exchange has been disabled from 9 AM GMT till the network upgrade is complete. The official statement reads:

“Binance will support the upcoming Ontology network upgrade. Deposits and withdrawals of ONT will be suspended starting from 2020/07/06 9:00 AM (UTC). Please note that the trading of ONT will not be affected during the upgrade.”

Ontology 2.0 upgrade will integrate new governance and staking protocol updates and further “lower the requirements for users to participate in Ontology governance.” The upgrade is expected to encourage several of its users to participate in staking and governance on the Ontology blockchain.

Users are not obligated to do anything during the upgrade with Binance handling the technical updates needed. Moreover, staking proceeds on the Ontology network, ONG rewards, will be active during the Ontology 2.0 network upgrade.

The Ontology network employs a dual system token using its native token – ONT – and Ontology Gas (ONG). ONT is a coin that can be used for staking in consensus, whereas ONG is a utility token used for on-chain services. ONT releases ONG periodically.

Binance also announced the completion of the ONT trading activity competition with over $50,000 worth of ONT rewards successfully deposited to winners accounts. Winners are alerted through email, and the records can be checked on the distribution page.

Developments on Ontology

Ontology’s partnership with Binance is stronger than ever with the exchange recently listing an ONT-backed token, ONT-33D, on Binance Chain. The token, which started trading on Binance’s decentralized exchange platform in April, is backed on a 1:1 ratio to ONT.

Ontology also announced a partnership with a decentralized oracle platform, Chainlink, at the end of June in a bid to boost the overall DApp development on the blockchain using data oracles from the former.

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Author: Lujan Odera

Crypto Market Bounces Back by 44.5% in Q2 As BTC Gains 78% Since Black Thursday: CoinGecko

The market cap of cryptocurrencies has grown by 44.5% within Q2, according to the first quarterly report by CoinGecko.

In addition to this, Bitcoin’s price gained over 78%, making a comeback from the March bloodbath of Black Thursday. However, the activity in spot trading has gone down by 55%, contrary to expectations.

“Bitcoin’s average monthly price is now up 78% from the March bottom. It took roughly 48 days for the markets to recover from the vertical drop of the Black Thursday, the day when Bitcoin fell vertically by 35% (over USD 3000) in 24 hours.”

The report, published on July 3, marks the first in a series of three scheduled releases. As the world emerges from lockdowns, markets surged throughout Q2. Going by the stats, the trend appears to have been replicated in crypto markets hence debunking the notion that crypto markets are not correlated to traditional asset prices.

Crypto Market Bounceback

Though highly volatile, the digital asset ecosystem may have passed a resilience test, given the economic effects of COVID-19. The crypto market bounced back from the March lows and now seems to have consolidated in what most stakeholders consider a stable position.

Currently, the total market cap of crypto stands at $268 billion, with Bitcoin dominating this portfolio at 63%.

Looking back at the onset of Q2, things were more uncertain, although crypto maximalists have always been optimistic about mainstream adoption, especially with COVID-19 now at our doorsteps. Well, an increase of 44.5% could probably mean that some of the underlying factors have triggered a shift to crypto assets.

Nonetheless, trading activity has been down as crypto hotheads shift focus to DeFi. CoinGecko also noted that the reduced spot trading is likely attributable to more people HODLing and diminished market confidence after Black Thursday. The report reads:

“This may also simply be a result of investors HODL-ing, having no confidence to trade, or perhaps a market shift towards DeFi and Derivatives trading.”

The shift in liquidity towards DeFi networks has significantly boosted ETH, as it topped gains compared to BTC and Tether. The DeFi market is on its way to hitting $2 billion in total locked value, making the ETH prospects even better. While this is the case, the USDT is the most popular trading pair in both spot and derivative markets. A sign that stablecoins have also found a niche in this volatile ecosystem.

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Author: Edwin Munyui

DApp Q2 Market Report Shows Massive DeFi Impact in The Decentralized App Ecosystem

The DeFi realm has registered tremendous growth in the past quarter (Q2) with some products posting some impressive figures. $4.9 Billion was channeled through DeFi dApps, a stellar 67% increase from Q1’s figures.

Q2 Dapp USD Vol

Q2 Dapp Market
Source: Dapp.com

The Basic Attention Token (BAT) emerged as the most popular token in Decentralized Finance Q2 figures recording a transactional value of $930 Million. The token that is utilized by parties in the digital advertising sector, dwarfed Ethereum’s numbers by a cool $300 and more than Ether and Dai combined.

The Ether, on the other hand, saw their active user numbers soar to an All-Time High of 1,258,527 more than doubling Q1’s figures. Their daily average active users have also increased from the 7,682 in the first quarter to over 40% in the second quarter, mostly attributing the COMP governance token launch.

The COMP token, incentivizing debt and lending facilities, has perhaps posted the most notable growth following massive response from the market on launch. Their market capitalization is skyrocketing from $131 Million to more north of $3 Billion in just the second month. Daily user numbers also more than doubling 2,629 to 11,879 as their value of the token achieved an all-time high of $372.27 on 21st June.

However, the supply of the BAT has dipped steadily from $324 million to $155 million last week and now just at $24 Million. This happened as soon as Compound restructured their reward system to scrape off the incentives after the Compound community voted to change their COMP token issuance criteria on 30th June. Just a meager $67 Million BAT has been lent in Compound since the dawn of July.

Notably, after the Hive hard fork from Steem after Sun’s hostile takeover, some budding dApps have opted to move to Hive from Steem. With Steem failing to launch new projects recently, the active users in Hive have now surpassed Steem’s.

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Author: Lujan Odera

VaultAge Solutions CEO Declared Bankrupt After Scamming Crypto Investors Out of Over $13M

Willie Breedt, chief executive officer of the crypto investment firm, VaultAge Solutions, has been declared bankrupt, who is currently on the run after defrauding thousands of investors, reported News24.

Started in 2018, the company traded Bitcoin and other cryptocurrencies on behalf of its investors and promised to act as a “digital vault that grows wealth over time” to “alleviate financial strains from individuals, entrepreneurs, investors, and communities.”

The Gauteng High Court in Pretoria has sent a sequestration order that forces debtors into bankruptcy, to Breedt, who is currently under investigation for defrauding 2,000 investors for 277 million South African rands ($13.3 million).

The order was given after one of the company’s most prominent investors, Simon Dix, who entrusted R7.5 million (just over $440k) to Breedt, applied for it. Insolvency was granted, and previously, two accounts belonging to the company were also frozen.

Breedt went into hiding two weeks ago after some irate investors sent a group of “debt collectors” to recover their money from him. Just before he disappeared, he told police that he was being intimidated.

After the court granted the order, the police and a team of specialist cryptocurrency forensic investigators raided a house in Silver Lake where Breedt was allegedly hiding since mid-June, but he hasn’t been arrested yet.

The police, however, did find several electronic devices, including a laptop and his hardware wallet, Ledger Nano, that store cryptos.

The central bank of the country, South African Reserve Bank has now assigned PricewaterCoopers to investigate ValutAge and all the agents that were involved in selling cryptocurrencies.

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Author: AnTy

Arca Labs Rolls Out Ethereum Based Fund After SEC Approves Digitally Transferrable Securities

According to a press release on Monday, July 6, 2020, Arca Labs, a digital asset investment firm, becomes the first-ever company to trade an SEC-registered Ethereum-based fund, ArCoin.

The bizarre case of the U.S Securities Exchange Commission (SEC) refusing to register a Bitcoin ETF gets even stranger as the securities regulator approved the trading of digitally transferable securities, in a first of its kind. ArCoin, the digital securities built on Ethereum blockchain, has become the first asset of its kind to be successfully registered under the Investment Act of 1940.

Arca Labs further plans to build more digitally transferrable assets that will be compliant to SEC’s laws in what they term as “portfolio of complimentary ’40 Act financial products”. Each ArCoin will represent a share in Arca’s U.S Treasury Fund, which is 80% interest-bearing, short-duration, U.S. Treasury securities.

A Groundbreaking Announcement

The blockchain world is looking at more regulated assets with this latest SEC approval giving a sense of a possible ETF approval in years to come. Rayne Steinberg, CEO of Arca Labs, referred to the announcement as “groundbreaking and transformative” in connecting the digital asset market to traditional finance. The CEO stated,

“It is truly exciting to be pioneering new digital investment products through our Arca Labs division that marry best practices used in traditional finance with the many potential benefits of digital and blockchain technology—this is the next stage of development for the digital ecosystem.”

The Benefits of ArCoin

The purpose of this Ethereum 1401-standard token is to combine the qualities of traditional finance regulation to the resilience of blockchain technologies. This digital innovation will enhance the overall security, provide regulatory oversight and transparency, otherwise lacking in the traditional field. Jerald David, the president of Arca Capital Management LLC, parent company to Arca Labs, said:

“ArCoin offers enterprises the opportunity to manage their business operations, treasury management, and payments with greater efficiency, less cost, faster settlement times, and direct tracking of all transactions.”

BEG reported Arca’s plans to launch the Blockchain traded fund (BTF) back in February to tokenize U.S Treasury bonds and bills.

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Author: Lujan Odera

China’s OTC Crackdown Puts Bitcoin at a Discount

Last month, there were reports of thousands of cryptocurrency over-the-counter (OTC) merchants and their clients getting affected as China froze their bank accounts to prevent illegal activity. Molly Mo, who runs marketing at a digital asset management platform Hashkey Hub said,

“The crackdown on OTC in China since last month is by far the most strict and widely affected one, is caused by USDT is widely used for money laundering, the action led by the PBOC, ministry of public security, central administration of customs, CBIRC, union pay….”

Bitcoin is also trading at lower prices at the OTC desks, at a difference of $50 to $65 than the spot exchanges.

Last week she shared on Twitter that “most” of the desks have been affected by this move with the users of a reportedly popular exchange, which has over 80% of the OTC market in China also getting their cards frozen.

Moreover, there have been reports of OTC brokers getting arrested.

The move has significant implications because OTC desks are the only fiat on-and off-ramps for China-based crypto users, especially after China’s central bank banned ICOs and cut off exchange’s direct channels for fiat deposit and withdrawals in September 2017.

In June, Sun Xiaoxiao, who ran an OTC desk and was formerly with Chinese crypto wallet startup Bixin, said Chinese police are investigating on the grounds of ‘dirty money,’ with causes including Ponzi schemes, casino businesses, and telecom frauds.

Moreover, the police have been catching up on their blockchain knowledge.

Earlier this month, Chinese crypto media channel 8BTC reported China’s Merchant Bank (CMB) saying they will “actively freeze” debit and credit cards based on “their own judgment” and assessment of risk.

Last month, the China Times reported that the Bank of China, the Agricultural Bank of China, the China Construction Bank, and the Industrial and Commercial Bank of China had been freezing accounts involved in “illegal activities.” They also said they wouldn’t freeze legal crypto transactions, but some people still claimed the same.

Last week, reports came that Zhao Dong, head of the OTC and crypto lending platform RenrenBit, was taken into a police station. Zhao also owns a small percentage, apparently less than 5%, of crypto exchange Bitfinex.

RenrenBit issued a statement in which it said Zhao offered to cooperate with the investigation, and it was unrelated to the company but his side-business.

China is “both world’s largest and most idiosyncratic crypto market,” according to Matthew Graham, CEO of Sino Global Capital.

While the Chinese government is yet again cracking down on crypto as the Supreme court and police believe digital assets are widely used in drug dealings, the stock market of the country is thriving as it hit a 1.5 trillion RMB ($213 billion), a five year high.

According to a Chinese publication, multiple reforms and increased foreign capital helped pave the way for this bull market.

But according to Dovey Wan, funding partner at Primitive Crypto, Chinese A shares rallies so hard is bad news for bitcoin. She said,

“This will further suck in retail capital into equity market (both are 80% or more retail in China), so makes the crypto market even more dull.”

On the other hand, the People’s Bank of China imposed a program in Hebei province to keep large transactions in check that would require retail (from 100,000 yuan to 300,000 yuan) and business clients (exceeding 500,000 yuan ($71,000)) to pre-report large deposits and withdrawals amidst the heightened concerns over the state of its financial system.

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Author: AnTy

CBDC’s Are the Future of Money and Payment Ecosystems: Visa’s Head of Crypto

Central Bank Digital Currencies (CBDC) are here to stay and may set the stage for a paradigm shift to a digital economy, according to Visa’s Head of Crypto, Cuy Sheffield.

In a recent series of tweets, the Visa crypto chief highlighted that the growing interest in CBDC’s is not fading away; hence stakeholders ought to be more involved in these developments.

Sheffield went on to note that governments will play an essential role in the adoption of Bitcoin and other crypto-assets given policy implications in issues like privacy:

“As governments evaluate CBDC, the path that they decide to take will have major implications for privacy, monetary sovereignty, geopolitics, and financial inclusion, as well as the global adoption of crypto dollars and Bitcoin.”

Today, developments within the CBDC space are more advanced, compared to research papers that previously defined the industry. Sheffield emphasized that this move from occasional papers to more solid content is triggered by the growing contribution from experts, organizations, and academics.

It is unsurprising that these sentiments coincide with Visa’s growing interest in digital currencies. The payments and card service provider filed for a digital dollar patent earlier in the year. It was also initially in the Libra association before leaving alongside the likes of Mastercard and eBay.

Global CBDC Trends

The latest annual Bank of International Settlements (BIS) report also indicates a spike in CBDC interest. However, the BIS also noted that stakeholders should be more focused on policy effectiveness as opposed to trying to outdo private projects.

That said, China seems to have taken an early lead, having piloted the digital yuan back in May as it prepares to ‘wipe out’ fiat renminbi (RMB) in circulation over time.

Europe has also taken an interest in digital currency for its member states. Though it might take much longer to get a consensus, France and Italy have already signaled the willingness to participated in a digital Euro pilot. While these tech advancements are promising, scaling to more significant masses might be the challenge as per a recent insightful report by the Bank of Canada.

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Author: Edwin Munyui