CBDC’s Offer Better Privacy Propositions Than Big Tech Digital Currencies: New York Fed

  • Fed research concludes that government-issued digital currencies offer better user data privacy than private companies’ digital assets.
  • However, CBDCs are not the answer to all problems relating to the privacy of payment data.

The research paper titled, “Monetizing Privacy,” by Rodney Garratt Professor of Economics at the University of California, Santa Barbara (UCSB) and Michael Lee, an economist at Federal Reserve Banks – Federal Reserve Bank of New York, states that central bank digital currency (CBDCs) will outperform the private company-based stablecoins such as Libra in protecting the privacy of user payment transaction data.

According to the research, the big tech firms are susceptible to selling users’ payment data to firms searching for an extra buck to boost their profits. It further states that a digital currency offered by these big tech firms such as Libra, led by Facebook and VISA’s digital currency, could lead to troubling cases of data privacy.

A follow-up post on the NY Fed blog by Lee and Garratt states some of these companies could become monopolies as more users join their platform and give them their data. Transactions using digital currencies will enable big tech firms with a competitive advantage to stack up on transaction data, further killing competition across the market. The post reads,

“This gap in product quality enables the [monopoly] firm to set discriminatory prices between payment types, taking into account the profit-maximizing quantity of data it would like to extract from consumers.”

“As a consequence, consumers obtain only a small share of the surplus generated from their data.”

The paper further states that public digital cash such as Bitcoin (BTC) could mitigate data monopoly by big tech firms. However, volatility in prices, fluctuating blockchain fees, and the rising costs of energy by BTC mining raise adoption issues.

A case for central bank digital currencies

The financial payment system is turning digital as the world battles with social distancing due to the global Corona Virus pandemic. With private big tech–owned digital currencies failing in offering users privacy on their transaction data, the research paper focused on government-issued CBDCs as the solution to privacy concerns.

The paper further states that a CBDC could also function as a measure against big tech data monopolies. CBDCs, however, not only offer increased privacy to users but also reduces the overall cost of fees and are environmentally friendly. The post reads,

“Nevertheless, the possibility that a privacy-preserving digital payment method may improve consumer welfare represents a relevant consideration for central banks to take into account.”

Regulators and authorities are urged to create policies around the privacy-enabled digital cash to ensure users are protected. Moreover, Garratt and Lee further claim that the privacy digital currency’s design should ensure that “the ability for consumers to purchase products without revealing their private data to vendors” is factored during development.

‘CBDCs not the answer to all privacy problems’

Despite the benefits CBDCs offer over big tech-built digital currencies, the paper notes that they also pose their own challenges in transactions. A “reliable and robust system” must be built to ensure that the privacy-preserving platform is secure at all times.

Notwithstanding, looking at “the commitment to privacy, regulators and lawmakers would have to rethink how to adapt current anti-money laundering practices.” Finally, a privacy-enabled CBDC could also affect the banking industry and financial systems, the report noted.

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Author: Lujan Odera

SEC Charges Rapper T.I. & Four Others for Promoting Fraudulent ICO, FLiK

The US Securities and Exchange Commission has charged Atlanta-based rapper Clifford Harris, Jr., better known as T.I., and four others for promoting an unregistered and fraudulent initial coin offerings (ICO).

T.I. promoted FLiK tokens in 2017 to his social media followers, falsely stating that he was a co-owner of the project boasted as “Netflix on the blockchain.” The platform was advertised as a streaming media platform with products that can be purchased with digital tokens, the SEC said in a statement on Friday.

The 39-year old rapper has agreed to pay the penalty of $75,000.

As per SEC’s order, he is not allowed to participate in offerings or sales of digital-asset securities for at least five years.

The company’s founder, a film producer, named Ryan Felton, who started FLiK and CoinSpark, is meanwhile facing claims that he misappropriated the raised funds to buy Ferrari, a million-dollar home, and other luxury goods.

“Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading,” said Carolyn M. Welshhans, Associate Director in the Division of Enforcement.

The complaint alleges that Felton secretly transferred FLiK tokens to himself and gained an additional $2.2 million in profits by selling them into the market.

Previously, boxer Floyd Mayweather and music producer DJ Khaled have also been sued by the regulators for hyping the ICOs.

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Author: AnTy

Crypto Rating Council Adds IOTA, BAT and USDC, While Ripple Gets Ignored

The Crypto Rating Council (CRC) is a consortium of United States-based crypto firms who advocates for better regulatory clarity in the crypto space and is backed by the likes of Coinbase, Kraken, Bittrex, and others.

Given the growing debate over whether cryptocurrencies fall under the security category apart from Bitcoin (BTC) and Ethereum (ETH) (they are considered as assets, given the level of decentralization and transparency), they analyzed a number of digital assets to determine whether they possess traits of Security.

In a blog post dated 2nd April, CRC revealed that they have inducted three new cryptocurrencies in its list with different ratings which include Basic Attention Token (BAT), USDCoin (USDC), and Iota (IOTA). The blog post also revealed that the recent analysis was based on reviewing their previous ratings along with new developments and available information in the public domain. CRC also updated the scores for Maker and Polymath tokens.

How Do CRC Ratings Work?

CRC rates each token on a scale of 1-5, the higher the rating, the higher its chances of showing traits of security. Security ratings are important since it ensures that these are not sold unregulated. Every country has different security laws and they must adhere by them and have a regulatory clearance before making it into the market. However, it is also important to note that CRC is not affiliated to any government body and its ratings are not endorsed by any developers, regulators or third-parties.

The CRC rating gave IOTA an overall score of 2.00 which makes it unlikely for it to be considered as a form of security. IOTA has always claimed to be among the decentralized projects and belive the current rating by CRC would really help it expand its credibility in the US market. The firm responded to their rating of 2.0 saying,

“With our Crypto Ratings Council rating, we believe the US market and CRC’s partner organizations will feel more comfortable and confident engaging with the IOTA token and protocol.”

Apart from IOTA, even BAT scored a 2.00 rating on CRC while USDC scored the lowest of 1.00 suggesting it inhabits the least qualities of security. USDC which is a US Dollar backed stablecoin, even DAI, the decentralized stablecoin scored 1.00 on CRC ratings suggesting stablecoins shows the least traits of security.

Ripple Shows High Traits of Security

Ripple backed XRP token when evaluated by the CRC back in 2019 scored 4.00 rating that suggest it shows high traits of Security. While CRC ratings are not taken into consideration by any government-affiliated agency or security regulators and probably won’t change any of their opinions, but Ripple is facing a lawsuit for being security in the United States. XRP still maintains a rating of 4.00 on CRC.

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Author: James W

February Cryptocurrency Trading Roundup – Bitcoin, Ethereum, and XRP Price Analysis

  • Although not quite living up to safe haven standards, Bitcoin fares better than stocks, bonds, and commodities in a widespread economic climate
  • BTC/USD consolidates above 21 weekly MA. A strong close above 200 MA could spur a recovery
  • ETH/BTC breaks above long-term resistance. XRP/BTC resurgence proves all too fleeting

After a jaunty start to the year, it was to be expected that Bitcoin would stumble upon a corrective phase sooner or later.

In a harrowingly bearish month for global markets across the board, Bitcoin wasn’t entirely immune to the circumstances, the cryptocurrency didn’t suffer to the same extent as heavily fiat-correlated assets.

The Dow Jones Industrial Average (DJI) suffered its worst monthly loss ever, sliding 2847 points, with 10-Year Bond Yields sinking to new all-time lows of 1.08% in February. In that context, Bitcoin’s 8% drop can be chalked up as a healthy correction.

Bitcoin (BTC/USD) Roundup

Bitcoin (BTC/USD) closed in February at $8,528 which, while close to the bottom of the monthly range, ensured that the pair avoided a bearish dark cloud cover pattern.

The drop towards the end of the month did, however, breach the 200 SMA, currently at $8,735, which now acts as the short-term resistance as the pair consolidates around the .5 Fibonacci retracement level.

After taking a nosedive below the zero line, the daily MACD is shaping to converge on both the zero, and signal lines.

Daily RSI is likewise shaping to regain ground above bull-cycle low of 40 after closing below the level for the first time this year. A strong daily close above the 200 SMA can instigate a move towards $9,200.

Looking at the weekly chart, 21 weekly MA at $8,450 is likely to be a key support level. Bulls will be hoping that a weekly close below this level is averted. While evincing some bearish convergence for the first time in twelve weeks, weekly MACD remains above both signal line and zero line.

Looking at some on-chain metrics for Bitcoin (BTC), although both the number and volume of large transactions dropped significantly in February. The network’s hash rate bucked the trend this month; rising by 18% from 116 quintillion hashes per second to set a new record of 137 quintillion hashes per second.

Altcoins had somewhat mixed fortunes in February as the risk-off environment understandably affected less liquid crypto markets than it did Bitcoin.

Ethereum (ETH/BTC) Roundup

This didn’t stop Ethereum (ETH/BTC) from piercing through long-term resistance levels to record its best monthly close since January 2018. The pair gained 33% toward the close of February at 0.0256 BTC.

After breaking above the 200 MA in the first week of February, the pair parlayed the momentum of a golden cross in the second week to break resistance at 0.022 BTC and soar as high as 0.027 BTC, before correction found support at .236 Fibonacci retracement level.

A bearish DI cross cannot be construed as particularly valid as ADX indicates the correction could be running out of momentum. The pair must avert a close below 0.025 BTC before reasserting bullish momentum.

Ripple (XRP/BTC) Roundup

Ripple (XRP/BTC) was following a similar trajectory during the first two weeks of February, aspiring to recover ground on Bitcoin, before tracing back to surrender all those gains.

The pair broke above both the 50 MA and 200 MA in successive weeks but failed to retain the key support levels at 2900 satoshis and 2750 satoshis, breaking down on the first retest for support.

The 50 MA has now flipped to form the new resistance level. A bearish RSI divergence indicates that short-term prospects of breaking above this level may be bleak.

Ripple CEO Brad Garlinghouse admitting recently that the company, which seeks to actively distinguish and distance itself from the cryptocurrency, “would not be profitable or cash flow positive without selling XRP,” effectively operating as a central bank for XRP through its supply manipulation, certainly did not help matters for XRP holders.

On March 1, Ripple unlocked 1 billion XRP from its escrow wallet, further diminishing prospects of its price recovery, as a sell-off could be afoot.

Elsewhere among leading altcoins, Tezos (XTZ/BTC) was by far the best performer, gaining 67% against Bitcoin from 18k satoshis to 31k satoshis.

Despite showing promise earlier in the month, other altcoins ultimately slid significantly against Bitcoin. However, thanks to Ethereum redivivus, Bitcoin shed some market dominance, which dropped from 66% to 64%.

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Author: Lamps T

Bitgo, Crypto Custodial Service, Launches In-Platform Trading For Institutional Clients

It has been a while coming as crypto custodians look for better ways to serve clients on their platforms. With security protocols no longer a competitive advantage in the field, ease of access and management costs are taking shape as the differentiating factors across most crypto custodial services, Bitgo becomes the latest to offer trading with coins stored in a hardware wallet.

On Tuesday cryptocurrency custodian, Bitgo announced a partnership with SettleBit, which aims to provide a direct gateway for clients, mostly institutional, to trade digital assets directly from their Bitgo account. Bitgo which was founded in 2013, offers specialized custody, ensures security and liquidity options for digital assets. They are currently handling over $15 billion in cryptocurrencies monthly.

Bitgo clients assets stored in Cold storage entirely

Now using SettleBit’s digital asset trade settlement platform, which has been integrated with their own, Bitgo clients can trade directly from their custodial accounts. Through a liquidity network, the clients can try to get their best rates and come to an agreement as soon as verification is complete and in the meanwhile their funds are safely stored in cold storage.

As for now the platform only deals with Bitcoin (BTC), Ethereum (ETH) and only one fiat currency namely the US dollar although they have expressed the desire to expand to more stablecoins and tokens. During the announcement Bitgo’s Head of financial services Nick Carmi explained how the partnership with SettleBit has brought about a solution that enables client’s assets to remain in cold storage as they trade.

“We know that many of our clients want to be able to trade without moving their assets out of cold storage… Using our settlement API, SettleBit has created a simple and elegant solution”

SettleBit’s CEO, Leor Tasman seemed excited at the opportunity they had created for the Institutional clients, the ability to securely trade digital assets that are with no settlement risks which is not common especially on Cryptoblocks.

“Trading with no settlement risk is the Holy Grail for any investor, especially on crypto block trades. Together with the world’s leading custodian, our technology is creating new opportunities for all market participants. We are excited about this opportunity”

The first successful trade was completed on Jan 22, by the Entertainment distribution network CTM Digital who transacted with $100,000 worth of Bitcoin.

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Author: Lujan Odera

Binance CEO Goes 4Chan Bitcoin Price Prediction by Saying $16,000 USD Incoming ‘Soon’

Changpeng Zhao, CEO of one of the largest crypto exchange and one of the better known influencers has predicted that Bitcoin might touch $16k price point soon. Although he did take a quip on the idea behind making price prediction for cryptocurrencies as most of them are without any technical basis and had never been precise. He said,

“Lol, price predictions are easy. It’s just hard to be right about the timing. We will see $16k soon-ish. 1.4 billion people working on it as we speak”

He tweeted,

The mention of 1.4 billon people could be a reference to China which has pushed for the implementation of blockchain technology in their nation. Many speculated that the last week’s Bitcoin pump of more than 40% in a single day was promoted by Chinese president’s announcement about rapid adoption of blockchain technology.

Although Binance is based out of Japan due to China’s policy which banned all crypto exchange from operating on Chinese soil, CZ is trying hard to lieu in the Chinese user base. Recently it announced that users can buy Bitcoin from WeChat and Alipay. Binance also opened an OTC desk for Chinese traders.

China is the Biggest Market

China is not just big in terms of human and natural resources but it also has one of the largest consumer market, and being a tech-centered nation, if any firm or platform can find an inway into the Chinese market, they can surely gain a large lead in their field, and CZ is making sure to leave no stone untouched to capture the Chinese space.

Binance is set to launch a new office in mainland China amid growing demand for crypto services in the most populated country of the world.

However talking about price predictions, none of them have aged well. Right after the massive bull run towards the end of 2017 many self proclaimed crypto pundits predicted the price to skyrocket in 2018. Unfortunately 2018 turned out to be a disaster year as the whole crypto market lost over 80% of its market valuation.

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Author: Hank Klinger

‘Bitcoin Price Bullish Momentum to Continue for a Year if $9,000 Support Level is Not Broken’

Bitcoin (BTC) has traded below the $10,000 USD mark for the better part of the past week as bears take over the market. However, one upcoming analyst, Nunya Bizniz, sent a tweet showing the possibility of a bullish run in the coming months. Nunya pointed out the 15 month Volume Weighted Moving Average has crossed below the price which is a bullish signal for BTC’s price. The cross occurred earlier in the year and offers investors hope of breaking the all-time high price before the end of the year.

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Signals are always late, never wrong. BTC’s 15 month volume weighted moving average sees a golden cross (Source: Nunya Bizniz)

While the crossing represents only an indicator of what is to happen in the coming months, bulls in Bitcoin are hopeful for an extended bullish momentum. The last time the price crossed above the 15 month volume Weighted Moving Average in late 2015, the bullish momentum extended for over a year. This shows BTC price may continue appreciating in the coming year or so.

Bitcoin Price in the Consolidation Phase, Targets $9,000 Support Level

Despite the pioneer cryptocurrency showing signs of long term bullish momentum, the short term price looks to fall below the current $9,600 USD mark. A technical cryptocurrency analyst, Yorke780, published a tweet on the possibility of an incoming bearish trend as the directional movement index (DMI) of BTC witnessed a bear cross which shows the BTC’s bullish run is nearing its end.

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The Directional Movement Index (DMI) sees a bear cross showing a possible bear run in coming days. (Image: Yorke780)

The price is expected to drop to the $9,000 USD support level before bouncing back to start a refreshed bullish momentum that may well push it past its ATH.

Bitcoin (BTC) price faces a consolidation towards the $9,000 USD support level. A bullish momentum expected? (Image: TradingView/@KenyanMiner)

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Author: Lujan Odera