Lebanon’s Fiat Currency, the Lira, Drops 50% of Its Value in 10 Days Due to Hyperinflation

Lebanon’s financial crisis is only deepening with each passing day, as the country is engulfed in hyperinflation.

An unofficial report suggested that the value of the national fiat Lira has fallen by 50% in a matter of two weeks. The devaluation of Lira has made it equivalent to 2 satoshis at present, highlighting the growing problem with the world’s financial policies.

Saifedean Ammous, the author of The Bitcoin Standard, took to twitter to point towards what flawed and centralized monetary policies can do. He highlighted that just ten years ago, one Lira was valued at 0.67 bitcoins while today it is mere two satoshis.

While the Lira versus the US Dollar has trended at $0.00066 since 1997, the past 2 years, with several economic mismanagements, saw its value fall by 56%. The life of ordinary citizens has become quite troublesome as their income remains the same while the cost of goods has doubled.

Hyperinflation: The Worst Effect of a Flawed Centralized Monetary Policy

Lebanon is currently undergoing economic hyperinflation, where the national fiat continuously loses its value, and people’s confidence in the central bank and the government is at an all-time low.

Just before the coronavirus pandemic hit the world in late February, Lebanon saw a string of violent protests and demonstrations against the central bank. It was also reported that citizens have burned down the central bank complex.

Hyperinflation is probably the last and worst stage of an economic system failure, which in turn leads to instability and, in many cases, civil riots as people go on a looting rampage once they can’t afford their basic amenities.

However, Lebanon is not just the only country struggling with this problem; Venezuela is a shining example of what corruption and flawed monetary policy can do. A state counted among the richest a decade ago has seen the value of its currency become negligible and not even worth the paper it is printed on. Similarly, countries like Iran, Zimbabwe, and even a few North American countries are facing the same problem.

Cryptocurrencies To the Rescue

It’s a common occurrence that countries the worst affected by hyperinflation or similar economic crisis turn to cryptocurrencies. People in these countries may not directly use bitcoin or crypto to make direct purchases. Instead, they use it as a bridge currency to keep the value of money intact.

A recent twitter survey of Lebanon’s youth suggested that 57% of the locals would prefer to be paid in bitcoin. Mahmoud Dgheim, a Lebanon citizen, said that people in his country are currently looking for a way to escape tight cash withdrawal restrictions and transfers and looking for a tool to give them financial freedom. Bitcoin is probably the answer to their problems.

Not just Lebanon, the Venezuelan government has started to accept bitcoin for its services after a failed attempt at national digital currency in the form of Petro.

Read Original/a>
Author: Silvia A

Targeting Institutional Investors: SBI Holdings Is Buying a Minority Stake in B2C2 Exchange

A unit of Japanese financial conglomerate SBI Holdings, SBI Financial Services is buying a minority stake in London-based crypto market maker B2C2 for $30 million.

This is yet another example of situational-focused crypto players tying up with the incumbent institutions to offer additional services to their clients. Meanwhile, SBI will be getting a new source of revenue, “as a recession has hit their core income stream of local retail traders,” said Reuters.

B2C2 will be the leading liquidity provider of SBI as the latter expands its crypto offerings to millions of its existing customers. On the other hand, the digital asset trading firm will benefit from SBI’s distribution network and financial firepower.

SBI’s balance sheet will complement B2C2’s asset-liability framework “to deliver an execution platform that will not only be a game-changer in crypto but also positions us to expand across asset classes as we set our sights on the $20bn-a-year prime brokerage market,” said Max Boonen, founder of B2C2.

On-Ramp for Institutional Investment

In 2016, B2C2 launched the first crypto-native single dealer platform. Currently, it provides liquidity to banks, exchanges, and hedge funds.

The platform already has a license to operate in Japan, and last year, the firm launched the first OTC streaming price feed and is authorized and regulated by the UK’s Financial Conduct Authority.

SBI meanwhile is launching a fully automated facility, an electronic prime brokerage built upon its single dealer platform, to provide competitive two-way prices in the funding market. This capability will expand B2C2’s existing secured financing operation, already lending hundreds of millions of dollars.

“We expect a lot of synergies with B2C2, a firm which has a large number of clients globally and offers abundant liquidity, excellent price competitiveness, and a diverse suite of products for their customers,” said Yoshitaka Kitao, President and CEO of SBI Holdings.

“We will work to develop innovative new crypto products and deepen synergies across our group of companies.”

Competition is Heating Up

Prime brokers provide services to hedge funds and active trading firms, which is a growing trend in the crypto industry.

Earlier this month, Bakkt partnered up with Mike Novogratz’s Galaxy Digital to launch a “white-glove service” for “multi-billion-dollar” asset managers looking to buy and store bitcoin.

Last month, Genesis Capital acquired the London-based custodian, Volt, to join the likes of identity Digital Assets and BitGo and build the “preeminent prime brokerage in the digital currency ecosystem.”

A week after that, Coinbase announced that it is looking to acquire Tagomi, a crypto prime brokerage platform. The deal, however, hasn’t been closed yet and is subject to regulatory approvals.

The crypto industry is fast building the infrastructure for the institutional investors who are currently driving the bitcoin market.

Read Original/a>
Author: AnTy

FCA Survey Estimates 1.9 Million People Currently Own Cryptocurrencies in the UK

According to a recent survey by the Financial Conduct Authority (FCA), which is working with the Government and the Bank of England, as part of a UK Cryptoassets Taskforce, more and more people are now aware of cryptos and getting into them. The survey states,

“We estimate 3.86% of the general population currently own cryptocurrencies. This amounts to approximately 1.9 million adults with the UK population (over 18) taken to be approximately 50 million.”

It is also estimated that 5.35% (2.6 million people) hold or held cryptocurrencies, up from 3% (1.5 million people) in 2019.

In this latest survey, 73% of adults compared to 42% last year have found to be heard of cryptos. Traditional media and online news are playing a part in this awareness with 28% of adults that were aware of cryptocurrencies had seen an advert.

Meanwhile, 45% of crypto owners have also seen a related advert and 35% of them said it made the purchase more likely. But those influenced were also more likely to subsequently regret the purchase. Crypto owners also understand the risks associated with the lack of protections, but the agency still states,

“the lack of such knowledge among some presents potential consumer harm to consumers.”

Bitcoin & Libra is all we know about

The research was conducted by FCA from 13 to 21 December 2019, with a nationally representative online panel of 3,085 respondents. After screening out those who haven’t heard about crypto, the agency added 483 individuals to the sample who were crypto owners for the “longer questionnaire.”

These crypto owners have a high technical knowledge and it has been found that 75% of them hold under £1,000, roughly $1,230, and half of them hold under £260, nearly $320.

Bitcoin remains the most recognized crypto while Libra, which doesn’t exist yet, 22% had heard about this upcoming stablecoin from Facebook.

Testing the knowledge of cryptocurrency owners it was found 90% conducted some research before purchasing cryptocurrencies, compared to 84% in 2019.

Speculation, Regulation, & Coinbase Domination

The most popular reason for buying cryptos remains speculation – ‘as a gamble that could make or lose money’ rather than as an investment of money.

Those investing for speculation purposes were also more likely to hold their cryptocurrencies for more extended periods. In comparison, those displaying a lack of basic knowledge tend to hold their cryptocurrencies for shorter periods.

While 12% never monitor the value of their holdings, 15% regret having purchased.

Almost 50% of cryptocurrency owners have never used digital assets, but a good 27% did use them to purchase goods and services.

Moreover, 31% of respondents who currently own crypto currently do not intend to purchase more crypto because they consider it too risky. 29% of these will buy more if it is regulated in the future.

Interestingly, 73.2% of consumers that do not currently own but plan to purchase cryptocurrencies in the future reported that the lack of regulatory protection has impacted their decision not to buy cryptocurrencies to date.

Unlike the previous times, this survey found that 8% of respondents used borrowed money to purchase cryptos. But these borrowers were most likely to be the ones displaying a lack of knowledge surrounding the technology underpinning cryptocurrencies or the absence of regulatory protections.

The crypto purchases were made majorly (83%) using only non-UK based exchange, with Coinbase being the most popular one with 63% followed by Binance (15%), Kraken (10%), Bittrex (8%), and Bitfinex (7%).

Also, a good 46% store their crypto on the exchange where they bought it, and only 24% keep it in on offline hardware.

Read Original/a>
Author: AnTy

Three Strikes, You’re Out for BitLicense Applicants Under NYDFS’ New Guidelines

New York’s regulatory and financial agency has issued a warning to Crypto companies vying for the states Bitlicense. According to the watchdog, companies could see their applications terminated if they fail to adhere to feedback.

This was made public on Wednesday, 24 June, when New York’s Department of Financial Services announced that it would be implementing a new ‘three-strike’ policy for each application. Implementing such a policy would allow the agency to respond more effectively to applications that do not adhere to requested feedback.

According to the Department of Financial Services:

“If all deficiencies, involving a particular application requirement, or set of requirements have not been fully and effectively addressed by the end of the response period for the third deficiency letter… the DFS may, without further notice, deny the application.”

The introduction of this ‘three-strike’ rule comes as New York celebrates the fifth anniversary since the Bitlicense was introduced. Since its conception, the state has been continually updating its regulatory framework for crypto companies to do business in New York easily. While Bitlicense’s structure has been regularly updated and re-evaluated, the state has approved only 25 companies. Even now, only 19 of them have received physical licenses.

One of the most recent applicants under New York’s Bitlicense was the derivatives clearinghouse company – ErisX in May.

So what was the true motivation behind making these changes, and implementing this rule? The agency mostly cited that it sought to help improve the existing procedure of applying for the BitLicense. Implementing a three strike policy would allow more responsive applicants to have their applications expedited. Meanwhile, companies that don’t adhere to regulatory concerns would have their applications rejected. The note continues,

“DFS believes this policy will benefit the majority of applicants who diligently advance their applications once they are under substantive review, allowing for more effective use of DFS resources.”

While the three strike rule is the most catchy change introduced, regulatory changes include the introduction of a checklist feature. The purpose is to ensure that companies have clear guidelines on what steps need to be addressed or have already been completed.

While these new regulations presume to make the process easier, publications have since argued that it may make the whole process far harder.

Read Original/a>
Author: James Fox

Japan’s Financial Services Giant, Tokai Tokyo, to Launch A Tokenized Securities Exchange

Japanese financial giant, Tokai Tokyo Financial Holdings, announced its partnership with digital asset firm Hash Dash, to build its securities token exchange. The company also owns the Tokai Tokyo Securities Exchange and is invested 500 million yen (~$4.7 million) in Huobi, Japan.

Tokenization of assets is picking up steam as more traditional financial institutions enter the industry, Tokai Tokyo’s exchange becoming the latest to venture the field.

According to a statement to Nikkei, the exchange will tokenize securities, starting with Japan’s real estate industry, then trade these digital assets on iSTOX, its subsidiary digital security exchange in Singapore.

The $64 billion Tokyo based firm raised $5 million in a round also participated by Thai’s, Kiatnakin Phatra Financial Group (KKP) back in November 2019 to build iSTOX. The digital securities exchange aim is to assist Japan-based firms seamlessly to raise capital through the exchange.

Hash Dash will be the brains behind the exchange sharing their expertise on tokenized security exchanges. The company will leverage blockchain technologies to ensure the security of funds and the transfer of assets to reduce costs.

The securities exchange started its operations earlier this year, opening a gateway to Japan’s private capital markets. The statement further states the company is exploring digitizing IPs and corporate bonds.

Read Original/a>
Author: Lujan Odera

NYDFS To Ease Bitlicense Approval Process as the Crypto Regulation Turns Five

The New York Department of Financial Services (NYDFS) has suggested modifications to Bitlicense’s issuance to make the state more crypto-friendly.

This license – introduced in 2015 – is now five years old, and has dramatically impacted crypto operations in New York since its introduction. While most crypto businesses view it as an obstacle, some companies find it to be within an achievable scope for compliance.

Currently, only 25 crypto firms have been approved by the NYDFS to carry out business in the big apple. The approval might, however, change given new proposals that seek to introduce conditional licenses and self-certifications as part of smoothening the approval process.

Going forward, crypto entities such as Bitfinex and Shapeshift, which terminated their New York operations following the Bitlicense roll out could make a gradual return to the lucrative market.

Conditional Bitlicense

This initiative will allow crypto firms looking to enter the New York market to obtain a conditional license by working with entities whose Bitlicense was already approved. According to the NYDFS’ logic, a firm that gets a provisional license will eventually seek the Bitlicense as it scales operations:

“DFS expects that an entity that seeks a Conditional License will endeavor to eventually seek and obtain a full BitLicense.”

Consequently, the new market entrants must document their intention to work with a Bitlicense holder. This will then be reviewed by the NYDFS coupled with a follow-up should an entity be granted the conditional license. In the event where a provisional license holder goes astray, NYDFS can step in to discontinue the approval.

Self-Certification

To further advance its impact, the NYDFS has introduced a guideline on self-certification for crypto assets that are still in the pipeline.

However, this only applies to licensed entities and will need the approval of at least three firms to self-certify that a crypto asset meets NYDFS rules. Linda Lacewell, an NYDFS Superintendent, said that this move is meant to boost crypto businesses while maintaining proper oversight:

“We want to regulate … as much as we have to and not a drop more because businesses need to do business and they need to operate.”

State of Crypto Business in New York

As mentioned earlier, the Bitlicense has significantly shaped New York’s crypto ecosystem. Notable players that currently operate under the ‘strict’ measures include Circle, BitFlyer, and Bitstamp.

According to BitFlyer’s Chief Compliance in the U.S, Dave Zacks, the approval process was, however, not easy and took almost a year:

“We don’t know how many applications NYDFS has under review currently, but the requirements are strict, and a lot of newer smaller entities don’t have the capital or capability to meet those standards.”

Nonetheless, crypto stakeholders eyeing the New York market can now try their luck with better odds. Such a move would not only be beneficial in terms of market share but also in building a trustworthy business having qualified to operate in the world’s financial hub.

Read Original/a>
Author: Edwin Munyui

Financial Conduct Authority (FCA) Calls For Crypto Businesses to Be Registered by June 30th

The U.K. Financial Watchdog, FCA, has reminded crypto-oriented businesses to register with them by June 30, 2020, so that the applications can be processed within the next six months.

According to the FCA, entities that haven’t registered by then, will not be legally recognized come the Jan 2021 deadline.

The FCA does not register “any businesses that started carrying on business in the UK immediately before 10 January 2020 and are not registered by the FCA by the 10 January 2021 deadline will have to cease carrying on business.,” reads the FCA statement.

Following a spike in crypto-related crime, the FCA was tasked in regulating this space as the Fifth Anti-Money Laundering Directive (5AMLD) came into action at the beginning of the year. This move is expected to reduce financial crime such as money laundering and terror financing, which appear to have found new avenues in crypto ecosystems. The call for registration is, therefore, no surprise to crypto firms operating within the U.K.

Notably, firms that previously operated in the FinTech space under U.K.’s Financial Services and Market Acts 2000, but have now scaled to crypto services, will be required to undertake a new registration. According to the U.K. regulator, this approach will help them in proactive supervision of crypto businesses:

“The FCA will proactively supervise firms” compliance with the new regulations, and will take swift action where firms fall short of desired standards.”

The 5AMLD & FATF Oversight Frameworks

To effectively regulate the crypto space, FCA will rely on the 5AMLD and FATF’s ‘travel rule‘ as underlying regulatory frameworks. With both in play, crypto entities will be required to provide information such as future projections, governance, employees, customers, and business objectives, amongst others.

Also, the FATF travel rule provides that crypto exchanges should share client information upon request when executing B2B transactions. This initiative affects around 39 countries, including China, which are expected to have complied upon a revisit by the FATF.

Read Original/a>
Author: Edwin Munyui

Japan’s Multi-Billion Asset Bank, Nomura, Launches Crypto Custody with Coinshares, Ledger

One of Japan’s oldest financial institutions, Nomura bank, announced the launch of Komainu, a digital assets custodial service aimed at financial institutions, in partnership with cryptocurrency fund manager, Coinshares and hardware wallet manufacturer, Ledger.

The service aims at offering a KYC/AML compliant and secure platform for institutions to store their crypto assets.

Nomura, with over $230 billion in assets under management (AUM), represents the largest bank yet to become a custodial service provider. Big banks are finally getting their hands dirty in the digital asset space, competing with nascent companies such as Coinbase and Gemini.

The Komainu Custody Service

The Komainu project, licensed by the Jersey Financial Service Commission, will be led by the CEO and co-founder of Coinshares, Jean-Marie Mognetti. The executive board comprises different experts in the financial field, including former fund manager at Credit Suisse Group AG, Kenton Farmer, as head of operations.

The former head of cyber defense at Banco Santander, Andrew Morfill, will be chief information officer and Susan Patterson, formerly at UBS and Credit Suisse will head the regulatory and compliance department.

Mognetti believes the Komainu platform will open up the field for more industrial partners to join the crypto field by harnessing the expertise of all the three partners. He further said:

“Komainu bridges the gap by bringing financial expertise and capabilities for institutional clients to feel confident their assets are in safe hands.”

Focus on KYC/AML Compliance

Institutional investment heavily ties digital assets custodial services choice to its ability to secure the capital raised and regulations observed, CEO of Ledger, Pascal Gauthier, said in a statement. He further added that failure meeting any of these requirements would “weaponize the digital assets against them.”

The competitive advantages that Komainu brings to institutions – KYC/AML compliance and secure cold storage services – aims to bridge this gap between traditional finance and digital assets. Jezri Mohideen, Global Chief Digital Officer at Nomura, aims at building the custodial service “as a regulated and secure digital asset custody solution” for its clients.

Further Efforts in Blockchain Development

Nomura Bank’s investment into the Komainu project signals a growing interest in the digital assets space by the largest financial institutions in the world. Previously Intercontinental Exchange’s, Bakkt, and Fidelity Investments were the highest-ranking regulated banks offering digital assets custody.

However, Nomura’s interest in blockchain technology has not started recently. For example, the Komainu project was first launched in May 2018, with the bank forming a Japanese Blockchain Alliance in early 2019.

Read Original/a>
Author: Lujan Odera

Institutional Grade Crypto Custodial, Copper Technologies, Joins Global Central Bank Think Tank, OMFIF

Institutional-grade crypto custodian, Copper Technologies, joins the Official Monetary and Financial Institutions Forum’s (OMFIF) Digital Monetary Institute (DMI) as a founding member. The non-profit organization launched in May 2020 aiming at formulating economic policy, public investment and central banking ideas for new and improved digital payment instruments.

Copper Technologies joins DMI as founding member

The London-based crypto firm becomes the latest founding member of DMI joining Giesecke+Devrient Currency Technology GmbH, Cypherium Blockchain and multinational bank, ING Group. The mission of the association is to provide an open platform for discussions and research on digital payment systems and central bank digital currencies (CBDCs).

The Institute will be publishing regular data, convening meetings with experts on new digital developments and innovations.

The statement from Dmitry Tokarev, CEO at Copper Technologies, showed delight in joining “policy makers, technologists, financiers and regulators” to develop new ideas and policies in the digital finance world. According to Dmitry, the OMFIF DMI forum opens up a gateway for public and private organizations to collaborate in “creating open and productive discussions” on the future of global finance and the opportunities digital payments offers. He added,

“As more and more institutions are beginning to see beyond the 2017 retail-driven image of the space, the real and long-term value of crypto, and blockchain more generally, becomes apparent. OMFIF has the potential to advance this cause, and move the needle on how the entire financial system views crypto.”

Copper Technologies promises an institutional grade custodial service with a keen eye on “accessibility, security and aligned compliance” aiming to bridge the gap between the digital asset world and the traditional finance systems.

Governments accelerated efforts

Governments, central banks and financial regulators across the globe are accelerating their efforts for a digital payment system in the wake of COVID-19. The spread of the pandemic through physical contact has shown the need for increased innovation in digital cash systems.

Moreover, the announcement of the Facebook-led Libra token also forced central banks to look into developing their own CBDCs. In his welcome statement to Copper Technologies, David Marsh, Chairman and Co-Founder at OMFIF addressed this saying,

“Central Bank Digital Currency (CBDC) has become a more pressing priority for central banks, first with the unveiling of Libra by Facebook, and more recently with the challenges of distributing financial help to citizens during the COVID-19 crisis.”

Read Original/a>
Author: Lujan Odera

Crypto Bank Avanti Raises $5M, Marking A Milestone Towards Banking Charter Approval

  • Avanti Financial Group closes its angel investment round led by Wyoming University foundation, raising $5 million.
  • According to Avanti CEO, this was enough to help them sail through the charter application process. 2021 timeline has been set to obtain approval and commencement of operations.

The Avanti Financial group has announced the end of its funding round, having raised close to $5 million in angel investor funding, marking milestones in their journey towards obtaining a banking charter.

“This announcement means Avanti is sufficiently funded to get through the process of applying for a charter application.”

Wyoming University Foundation took charge of the funding round, with involvement from Morgan Creek Digital, Blockchain Capital, Digital Currency Group, Lemniscap, Madison Paige Ventures, Malex Enterprises, Susan B. Anthony, LLC amongst other fintech and crypto enthusiasts.

The Avanti Financial group was launched by Blockchain proponent – Caitlin Long – in February this year. It is currently in the process of acquiring a banking charter from Wyoming authorities that will greenlight them to service the digital asset industry. The CEO set a 2021 deadline by which they should have received charter approval and commenced operations.

According to CEO and founder, Caitlin Long, they received an overwhelming response from the crypto community, with the round being oversubscribed. Long was particularly impressed that other like-minded parties shared the vision of the cutting edge infrastructure that her company was building.

“We are building critical infrastructure for the digital asset industry… the magnitude and mix of our support underscore that multiple camps want to see this infrastructure built.”

Long was, however, keen to highlight that they would require additional funds if their application is to sail through. Citing that they had been liaising with industry overseers in the region to get an approximate figure of how much capital would suffice. They have already submitted the first draft of the applications awaiting a response from the authorities.

UW CIO Allotted Seat in Avanti Board

Philip Treick, University of Wyoming Foundation’s CIO, was allocated a board seat at Avanti seemingly to represent UW’s interests. Treik believes that his company voted to fund Avanti because they deemed the infrastructure crucial to this new asset class. He also highlighted the challenges they were encountering while receiving donations in crypto that were crucial to their Blockchain efforts.

Meanwhile, from the beginning of next month, Insurance companies based in Wyoming will be able to trade and feature crypto assets in their investment portfolios.

Read Original/a>
Author: Lujan Odera