Ripple SWELL 2019 Update: Economist Dr. Raghuram Rajan Talks Blockchain Financial Inclusion

Dr Raghuram Rajan, economist and financial analyst, took the stage at the Swell 2019 conference this month that was held in Singapore. During his talk, Rajan, explained the importance of blockchain technology in the financial sector and how it’s poised to revolutionize businesses around the world.

One specific note of Rajan’s talk was the application of blockchain tech in the existing financial system as well as the impact that globalization will have on world markets.

“We are due for stronger productivity,” began Rajan.

“Tech innovation doesn’t always translate to actual productivity growth. For corporations to really learn how to use emerging technology, they need to reinvent the system. Once this is managed, we will see the pace of growth increase—not the moderate growth we see today.”

The power of banking establishments were also highlighted as a potential problem by Rajan. He stated that these centralized institutions create “fear and fury” amongst the populace, while decentralized blockchain solutions can be used to help bridge this gap of fear.

“At an abstract level, what we see today is increased fear and fury at centralized banks. Across the world, there is a break down in globalization and a worry from businesses about adhering to rules, set by another country. The answer is more decentralized solutions, like blockchain technology—that people trust,”

said Dr. Rajan.

The topic of micropayments was brought up by Rajan as a possible area for disruption by blockchain and cryptocurrency technology.

“We’re going to see intermediaries negotiate for payments with information. If data belongs to the individual then it can be exchanged through micropayments and doesn’t become a source of monopoly. In this way, decentralization disperses trust and power, and ultimately breaks up monopolies.”

Read Original/a>
Author: Matthew North

Many Reasons To Be Bearish On Bitcoin Price But GBTC Premium Isn’t One Of Them, Economist

  • As GBTC premium drops, analyst Timothy Peterson BTC’s drop to $6,000
  • According to economist and trader Alex Kruger, this is plain “nonsense.”
  • GBTC premium “not useful for making price calls,” Kruger said

Bitcoin is currently trading below $8,000 at $7,948, as per Coincodex and at the moment, there are “many reasons to be bearish,” says economist and trader Alex Kruger.

But the GBTC premium is not one of the reasons that will drive BTC price down as it just reflects current conditions and “not useful for making price calls.”

Recently, Timothy Peterson at cane Island Alternative Advisors published a blog post where talks about the relationship between the premium investors pay on Grayscale Bitcoin Trust (GBTC)’s OTC shares and the leading cryptocurrency’s price.

Based on this relation, it is likely the Bitcoin price could drop as much as 30-40% in the coming months as the GBTC premium has fallen from $4.00 per share to $2.00 per share.

“Bitcoin’s price should fall from about $12,000 to $6,000,”

he concluded.

Although the analyst says the relationship between GBTC premium and BTC price hasn’t been predictable and stable over time, fundamentals models also suggest BTC’s value at $6,000.

“It appears that institutional and long-term US investors in GBTC are expecting this price level for bitcoin as well,” he wrote.

However, according to Kruger that is simply “nonsense.”

“Many are now talking about how BTC may drop to $6,000 according to GBTC’s premium. That, my friends, is nonsense.”

The correlation between Bitcoin and lagged GBTC variables, Kruger explains is “consistently zero.” As such, predicting the value based on GBTC has no value.

He points out that the correlation between BTC and GBTC premium is moderate, 0.25 in the last year and “statistically significant.” But correlations with lagged premiums hover around zero and not statistically significant, he added.

“Predicting the value of bitcoin-based on GBTC premiums widening/narrowing has no value.”

The GBTC premium to NAV, he says is reflective of current market conditions and not a leading indicator for the flagship cryptocurrency.

Using the GBTC premium to find BTC value would be analyzing how weather affects BTC.

“The tail does not wag the dog,” concluded Kruger.

However, Tom Lee, the managing partner and head of research at Fundstrat says, “Low premium has been an interesting time to watch bitcoin—not sure if it’s tail wagging dog but low premium does tell us a bit the weakness of sentiment.”

Read Original/a>
Author: AnTy

Russian Central Bank Head Says “No Obvious Need” to Issue a National Cryptocurrency

Speaking at the Finopolis forum of innovative financial technologies, Elvira Nabiullina, Russian economist and head of the Central Bank of the country said the regulator doesn’t see a need to issue a national cryptocurrency, reported Russian News Agency, Tass.

“As Russia’s Central Bank, we have been studying this topic and the need to issue a national cryptocurrency is not obvious for us,”

said Nabiullina addressing Deputy Governor of the People’s Bank of China Fan Yifei.

“Not only for technological reasons, but also because it is (difficult) to really estimate what advantages will the national digital currency give, for example, in comparison with existing electronic non-cash payments. There are many risks, and the advantages may not be obvious enough,”

she added.

Back in July, Nabiullina said that one day the institution could launch its own digital currency but the technology must ensure “reliability and continuity.” But at that time as well, she said that fiat currency settlement systems are improving and already have

“good dynamics.”

She has repeatedly pointed out in the past that the regulator does not support the legalization of cryptocurrencies as a legitimate payment facility.

Earlier the lower house of the Russian parliament, the State Duma adopted a bill on digital assets.

Meanwhile, Fan Yifei said China is exploring the possibility of creating a national cryptocurrency. He believes it is important to cooperate with other countries so that regulatory standards could be developed.

After five years of research, China is finally ready with its cryptocurrency which is expected to launch soon.

Fan YiFei didn’t specify the launch date but said first there is a need to conduct studies and also take into account other countries’ experience.

Read Original/a>
Author: AnTy

ING Chief Economist: Central Bank Cryptocurrency Developments Will Happen in Next 2-3 Years

Mark Cliffe, chief economist of ING bank believe that central banks around the globe would move towards creating their own digital currency. Cliffe was responding to a question on when would a central bank among G20 nations can launch a full-fledged digital currency.

2019 has been the year of crypto adoption despite the ups and downs of the trade market. Private technology giants like Facebook and Telegram have announced the launch of their digital tokens, while many others are pondering over the same. SoFi, a financing firm added crypto to its trading platform, Bakkt launched “physically” settled bitcoin futures contracts.

Many governments around the globe who were either skeptical over regulating cryptocurrencies or were watching from the sidelines have decided to regulate it. China has fast-tracked its stable coin launch after Libra’s announcement, France and Portugal have made crypto transactions tax-free while Russia has proposed to tax crypto under property tax code.

Banks must strategize their digital currency plans in the same timeline as private sectors

ING last week released a report in which it discussed the growing trend of private firms releasing their own stablecoin, especially focusing on the recent announcement of Libra. The report pointed out that central banks around the globe must start thinking more seriously towards adopting the modern fintech trend before the private sector captures the future financial market.

The report also hinted that Libra is putting pressure on these central banks to start mulling about the ongoing trend of crypto. However, the report also downplayed the argument of future being cashless.

Cliffe’s response came during an event organized joint event held by ING and the central bank thinktank, OMFIF. The meeting was to discuss,

“Rapid advances in distributed ledger technology have spurred debate about the possibilities, advantages, and drawbacks of central bank digital currencies. The principal limits and trade-offs seem to stem from CBDC’s economic, monetary and financial contexts, and depend on underlying policy and political preferences concerning privacy, data administration, market power, cybersecurity, and the division of labor between the public and private sector.”

Read Original/a>
Author: Gabriel Machado

Blockchain’s ‘Embedded Supervision’ Could Allow For Easier And Faster Compliance: BIS Economist

Raphael Auer, an important economist of the Bank for International Settlements (BIS), has recently devised a new low-cost solution for compliance in the financial market. The BIS, which is known as the central bank of all central banks, has an interest in the stability of the world economy and has been recently interested in the blockchain, too.

The Economist has called this new method “embedded supervision” and affirmed that this new way of being compliant is different from regulatory technology and supervisory technology. Auer is the principal economist of the monetary department of the BIS, so his paper will possibly be read by several important people in the market.

He affirmed on the paper that the current compliance procedures are very expensive. They include gathering all the data and delivering it to a lot of people. With embedded supervision, however, the cost of checking and distributing the data would be drastically lowered. This, he affirmed, would be important to keep the process cheap, private and trustworthy.

This new technique uses machine learning to monitor the industry and automate the process. This reduces the need that companies have to actively work on collecting and sending the data, as the algorithm will do most of the work for them. According to Auer, some countries such as Lithuania are already using this kind of solution.

It is also important to see that this is not the first time that Auer publishes a study on blockchain technology. He also published one related to proof of work algorithms and showed some of its inefficiencies.

Read Original/a>
Author: Hank Klinger