Social Media Giant Launches ‘Facebook Finance’ Division to Push For Payment Opportunities

  • Facebook Inc. is determined to push its strides in the payment industry with the launch of the F2 division, Facebook Financial, to handle all its payments.
  • The division will be led by the co-founder of Libra Association, and Novi CEO, David Marcus
  • Stephane Kasriel joins from Upwork Inc.

The largest social network company in the world is launching a new payment and commerce division led by Davis Marcus. Facebook Financial will be in charge of all the payment projects currently in development under FB, including WhatsApp Pay, Novi, and any universal payment features set to be built on Messenger and Instagram in the future.

The launch of the division focuses its energy on building stable commerce systems within the Facebook-controlled apps, in a bid to increase advertisement revenue and keep users longer on the platform, the Bloomberg states.

One of the key developments F2 will work on is the launch of WhatsApp Pay in Brazil and India to boost e-commerce. However, the process of registration and tough regulations in the country are slowing the implementation process.

David Marcus, who has championed for the development of digital currencies since the launch of Libra, states the company is working with financial regulators in these two countries to integrate payments on their apps. He said,

“It’s helpful to have specific expertise in financial services regulation to build things the right way from the get-go.”

Former CEO of the freelancing marketplace, Upwork Inc., Stephane Kasriel, will join the Facebook Finance division as a payments vice president, deputizing Marcus.

Recently, Facebook CEO Mark Zuckerberg explained the benefits of Libra to Facebook shareholders during the AGM, stating the stablecoins will usher in a new wave of higher prices for advertisements on its social platforms.

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Author: Lujan Odera

The Curious Case of the New Bubble in the ‘DeFi’ Town of Crypto

As in 2017, Initial Coin Offerings (ICO) was the craze in the crypto industry, in 2020, it’s decentralized finance (DeFi) that is rocking the world of crypto enthusiasts.

This year, DeFi has grown at a fast pace, with a record $3.5 billion value locked in this sector. Also, 4 million ETH are locked in these protocols.

Many argue that DeFi space is highly risky, which as we saw with numerous DeFi hacks this year, holds true. But at the same time, it is in its early stages, with innovations taking place every day. It is actually up to the community if it will be the start of something truly decentralized.

When it comes to decentralization, amidst the DeFi frenzy has emerged a new bubble “YFI” — a “completely valueless 0 supply token.”

The latest DeFi token that boasts of 1,000% yield as a result of a rapid spike in demand, but still yEarn has previously delivered annual returns of about 10% constantly for its lending pool.

The most interesting thing about this token by yEarn protocol (previously called iEarn) is that it started with $0 value but overnight skyrocketed to $2,500, driving $150 million of deposits, as ‘farming it’ yielded a whopping 1,000% annual returns for some traders.

Yearn Finance Chart
Source: CoinGecko

“Those of you in the old school who believe this is a bubble simply have not understood the new mathematics of one of the most fairly distributed project launched since BTC,” said analyst CL.

A yield aggregator, yEarn, redirects users’ deposits to lending markets with the best rates.

Unlike other projects where teams keep the majority of the token and in result voting power, the entirety of this protocol is in the hands of the community even though yEarn founder Andre Cronje shared In its official announcement that they want to give up control over its governance token “mostly because we are lazy.”

Yet another interesting aspect of this token is its supply, which the community is voting to cap at 30,000. These YFI tokens are distributed to those who deposit funds to yEarn pools, which soared by $150 million in just three days after the distribution first started.

The flow of money into its liquidity pool on the Curve DEX had the volume of yCurve surpassing $100 million.

Interestingly, yEarn’s unconventional approach has led the community to propose relocating tokens back to the founder. “If this proposal passes then it would be the one of the most legendary stories in crypto,” said analyst Qiao Wang.

Even the control of YFI has been put in a multi-signature wallet, which requires 6 out of 9 participants to agree on changes, and the founder Cronje is not a member of it.

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Author: AnTy

Institutions Are More Committed To Blockchain Technology Than Ever: Deloitte Survey

  • Global industry leaders are embracing blockchain technologies and digital currencies in a rate unseen before, according to the latest annual edition of Deloitte’s “2020 Global Blockchain Survey”.

A survey conducted by 1,488 executives across several industries across 14 countries, including Canada, China, Brazil, USA, South Africa, U.K., United Arab Emirates, and Switzerland revealed 55% of the big corporations are looking at blockchain integration as a top-five strategic priority in their companies. The key takeaway from the 2020 Global Blockchain Survey is,

“Organizations appear to be more committed to blockchain technology than ever and demonstrating this by implementing it as part of their normal course of business.”

Note: the survey focused on executives who had a clue on blockchain technologies tilting the overall distribution. Additionally, 100 respondents who have already tested blockchain integration within their companies (must have at least $3 million in VC funding) were also included in the survey.

Industries showing extreme blockchain tech craze

The number of executives that have brought blockchain technologies into production in their firms stands at 39%, a sharp rise from 23% in 2019. For larger firms, those with at least $100 million in revenue and $1 billion, the number goes up to 41-46%.

Deloitte Survey
Deloitte Global Blockchain Survey 2020

Digital assets as a replacement?

The digital currency race seems just as important as that of blockchain technology integration, with 89% stating digital currencies will be used in their industry in some way. Of these, 53 percent believe that digital assets will become “very important” in their line of industries.

These institutions are also gunning for the growth of a wide variety of digital asset classes with enterprise tokens, asset-backed stablecoins, and decentralized tokens such as BTC, a popular opinion. In a question on whether digital assets will, in the future, replace the fiat currency system, the group overwhelmingly agreed despite the different countries.

China leads in this aspect, with 94% of the respondents saying a digital currency will replace the Yuan. Brazil and UAE respondents also saw high scores of 92% and 90%, respectively. However, only 71% of South Africans believe digital currencies will replace the Rand.

Skepticism Surrounds Blockchains

However, despite the growth in institutional appreciation of blockchain, there is growing skepticism surrounding the hype of the blockchain technologies and whether they can deliver on promises. 54% of the respondents believe the technology is overhyped, a rise from 43% and 39% in 2019 and 2018, respectively.

Deloitte-Survey
Deloitte Global Blockchain Survey 2020

Cybersecurity has been one of the critical areas affecting the overall adoption and advancement of blockchain and digital assets strategy across industries, 21% of the respondents said. Positively, nearly 60% of the respondents believe cybersecurity is part of the problem to solve hence needed to be figured out in their strategy.

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Author: Lujan Odera

Japan’s Top Banks Join Crypto Exchange-Led ‘Study Group’ to Discuss Digital Payment System

  • Three Japanese banking industry heavyweights are joining arms in a study group to focus on digital payment settlement networks in the country.
  • The study group is led by local cryptocurrency exchange, DeCurret Inc., giving possible hints of a crypto integration.

Top Japanese banking institutions, Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group (MUFG), alongside experts and industry leaders in Japan joined a study group to look into digital payment systems.

The group will meet once or twice a month from June to September this year chaired by former head of the Payments and Settlement systems, Bank of Japan (BoJ) and current director at Future Corporation, Mr. Hiromi Yamaoka.

DeCurrent Inc., released a statement dated June 3, 2020 outlining the key agendas of the meetings including digital payment systems, application of distributed ledger systems in the economy and digital currency settlement platforms within Japan.

The wide scale penetration of digital payment services and blockchain in Japan is remarkable. Ripple Inc.’s partnership with SBI Holdings has seen a number of big banks take on blockchain development including Fukushima Bank and SFMG. The study aims at coming up with a standardized version of these systems and blockchain infrastructure. The statement further noted,

“The purpose of this study group is to examine and discuss challenges and solutions concerning digital currencies and digital settlement infrastructure, to find a consensus toward their realization, and to present a direction for standardizing services and infrastructure.”

Other top firms that will join the group include the East Japan Railway Corporation, KDDI Corporation and Mori Hamada & Matsumoto in Tokyo. Japan based blockchain firm, Accenture Japan Ltd. and SIGMAXYZ Inc. will act as cooperating companies.

The study, once published, will be sent to the observant teams from the Ministry of Finance, Ministry of Trade, Economy and Industry, the Financial Service Authority (FSA) and the Bank of Japan.

DeCurret launched operations back in 2018 gaining approval to launch in Japan, and in March the following year, from the FSA. The license allows the exchange to carry out digital payment services and trading in the country.

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Author: Lujan Odera

Chainlink, IBM, ING, Microsoft, NASDAQ, and R3 Among First to Join InterWork Alliance

Top financial and blockchain industry companies have formed the InterWork Alliance (IWA) in a bid to standardize the business and enterprise tokenization market.

The alliance launched as a platform-neutral, non-profit organization, aiming to “create standard frameworks to boost the overall innovation and development of tokenized ecosystems.

At launch, the IWA comprised a total of 28 companies including traditional financial institutions such as NASDAQ, UBS, and R3; technological heavyweights such as Microsoft and IBM and blockchain companies including Accenture, Chainlink and Hyperledger.

Here is the full list:

InterWork Alliance

A New Tokenization Standard

Over the past decade, the tokenization of assets has exploded, disrupting the global economy. But the privatization of this process may stall the wide-scale adoption of these assets. The IWA aims to solve this by developing a ‘standard way’ to create these tokens before selecting a platform to station your project.

InterWork Alliance President, Ron Resnick said:

“The Alliance can deliver a proven, standard approach that is required to bring consumer trust into this space.”

The standards set by the Alliance will govern the creation of distributed assets, dApps, build frameworks to tokenize traditional assets, writing contracts over these tokens and maintain security/privacy of user data.

Marley Gray, principal architect, Microsoft, and the InterWork Alliance Chairman also added:

“The IWA provides a forum where industry participants can take real-world use cases as diverse as improving carbon market efficiency or trade finance efficiency, and use the technology-agnostic token and contract definitions to foster interoperability and drive widespread adoption – that’s the big picture of what we need to do in the Alliance.”

The IWA Framework on Tokenization

The IWA will have three key levels of framework implementation:

First, the Alliance will focus on the “The Token Taxonomy Framework” which provides a universal language to define a token and what it entails.

Secondly, “The InterWork Framework” is the layer that would allow businesses to implement multiparty contracts (MPC), enabling communication between them even if they choose a different blockchain to deploy.

Finally, “The Analytics Framework” enables businesses to fully leverage the market data from the system while enhancing the highest levels of privacy and data security.

The IWA has received several commendations from top firms, including the World Economic Forum (WEF). Sheila Warren, head of Blockchain and Data Policy, and member of the Executive Committee, WEF, said,

“Endeavors that provide platform-independent opportunities for businesses to focus on how to define the token models and contracts they need like the InterWork Alliance does, are both timely and important.”

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Author: Lujan Odera

Ethereum’s Top Coin Mixer, Tornado Cash, Updates Contract to Become Fully Trustless

  • The cryptocurrency industry is becoming more anonymous with the rise of coin mixer companies like CoinJoin, enabling users to mask their transaction history on the blockchain.
  • Recently, Ethereum’s top mixer announced developments on its platform to create a “completely trustless and unstoppable” mixer.

Tornado Cash Completes its Biggest Trusted Setup Ceremony

Ethereum’s top coin mixer, Tornado Cash, announced the completion of its “trusted setup ceremony.” A cryptographic process in its latest version, and further modified its smart contract to create a perpetual self-executing code.

According to the official announcement on Medium, the ceremony, completed on May 10 represented the largest ceremony yet in attendance.

The published post reads:

“We are happy to announce that our trusted setup ceremony is now complete. With a record 1114 contributions, this was by far the largest Trusted Setup Ceremony to date.”

Previous all-time high attendance in the conference was around 200 participants, which shows the ballooning growth in privacy-focused platforms.

The platform will now employ a cryptographic method known as multi-party computation (MPC), enabling secure key management by sharing fragments of the key on multiple computers. This ensures that at no point is a single, vulnerable computer responsible for an actual key.

Despite Tornado Cash’s new version launching with MPC security functionalities and the self-executing code, some analysts remain wary on the platform offering total anonymity.

Privacy Concerns on Coin Mixers

One of the biggest challenges that coin mixers face in masking transactions is the lack of a deep “anonymity set”. The more cryptocurrency brought into its ecosystem – the better.

With a larger number of transactions coming into the platform, the more secure the mixer will be. Mixers rely on several transactions to better obfuscate those coming in and going out of the platform.

Crypto Data Company, Chainalysis’ Maddie Kennedy said there are concerns on the level of security these mixers provide as the company still finds loopholes to track users’ transactions. He said:

“While mixers, CoinJoins, and solutions like Tornado Cash can make tracing funds more difficult, Chainalysis can often still follow funds through them.”

Moreover, Gavin Andresen, Bitcoin Core’s early developer, argues that coin mixers are still leaving room for user transactions to be traced, given the complexity of using the platforms privately. He echoed Kennedy’s point adding:

“It is really hard for mere mortals to use something like Tornado (or CoinJoin or other similar technologies) in a way that doesn’t leak information about their wallet.”

The Regulation Dilemma

Finally, coin mixers face a regulation dilemma as countries focus on these platforms as money transmitters.

So, what is the issue with this? Well, money transmitters are regulated by the government and therefore have “obligations” set by the Bank Secrecy Act (BSA). This law requires strict adherence to KYC/AML, which beats the purpose of the mixers.

In a bid to be on the right side of regulation, Tornado Cash v2 will include a cryptographic note that will allow exchanges, authorities, and governments to trace the transaction history if the holder provides it.

However, regulation is not something that Tornado’s Storm and co-founder Roman Semenov fear as Storm explained that the self-executing code does not implicate the developers.

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Author: Lujan Odera

China’s PboC Financial Committee Aims For ‘Accelerated Blockchain, Fintech Development’

  • The People’s Bank of China Financial Committee, responsible for the fintech industry in the country held its first meeting this year earlier in the week.
  • The officials called for an accelerated effort in studying and implementing the “FinTech Development Plan (2019-2021)” which includes blockchain integration in various industries.

The meeting, held in Beijing, was chaired by the Vice President of the Party Committee of the PBoC, Fan Yifei, presiding over both the PBoC officials and heads of directly owned industrial companies. According to a publication by local media channel, Sian, this meeting focused on the theoretical and practical research in the financial and technology industry, planning guidance and application of these technologies, and the next steps to implementing them.

Yifei spoke on the need to accelerate blockchain technology and FinTech in preparation for the 2021 deadline for its development plan. The plan aims to develop a financial system that will contribute to and improve the current legacy systems making them more “adaptable, competitive and inclusive.”

In preparation for the digitization of the current modern financial systems, the officials are accelerating efforts in studying the fintech development index system, carefully monitoring dynamism and comprehensive evaluation, guiding financial institutions to accelerate the digital transformation, and continuing to enhance technology applications.

In conclusion, the officials called for an accelerated push to adopting these technologies to enhance better risk prevention measures and provide a level field ensuring regulation and “penetration of supervision” is upheld. The officials concluded,

“It is necessary to strengthen the application of regulatory science and technology, actively use big data, artificial intelligence, cloud computing, blockchain and other technologies to strengthen the construction of digital supervision capabilities.”

The PBoC has been on the frontline in the implementation of blockchain technologies in a bid to increase the efficiency of regulation within the bank and state. Since announcing its digital currency and electronic payment system back in 2018 the government has come on strongly supporting it led by President Xi.

Recently, the bank announced they will start testing the DC/EP this month by paying state employees using the digital currency.

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Author: Lujan Odera

Proof of Stake Alliance Proposes New Guidelines That PoS Networks Should Follow

Industry advocacy alliance, Proof of Stake Alliance (POSA), is set to release a number of recommended standards that firms involved in proof-of-stake (PoS) consensus will follow in order to lessen the regulatory hurdles posed to various networks.

According to the alliance, they held consultative talks with the U.S. Securities and Exchange Commission (SEC) at the start of the year to talk more candidly in regards to their proposals and also give out their white paper that contains various industry recommendations.

The alliance brings together some of the major industry players such as Polychain, Cardano Foundation, Tezos, Coinbase as well as Bison Trails.

The alliance is seeking to enhance the use of proof-of-stake (PoS) protocols which succeeded Bitcoin’s proof-of-work (PoW), as it is perceived as highly scalable and efficient.

The meetings with the SEC were conducted in February and were meant to explain to the regulator how PoS technology works and how the regulatory framework could work.

According to POSA founder and President, Evan Weiss, the members were extremely impressed that the SEC took the time to understand the concept of staking and how it can be successful in the US. Weiss stated that the discussion brings an opportunity for the alliance and the regulator to learn from one other.

Weiss explained:

“We’re coming out with some industry-driven solutions around staking as a service which we believe will really help push the ecosystem forward and ensure that staking as a service and staking can grow in the U.S. without being subject to some regulatory landmines and hurdle.”

According to Coinbase’s product manager, Bryce Ferguson, it is essential that industry players engage in an open discussion with the relevant authorities and regulators. He also stated that it is imperative that staking service providers adhere to various standards. He added that it is only through acting as a group that Proof of Stake will succeed.

According to the announcement, Cosmos (ATOM), as well as Tezos (XTZ), were used as proof of stake examples that are already live.

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Author: Joseph Kibe

66% Of Europeans Optimistic Crypto Industry Will Survive The Next Decade: bitFlyer Report

More than two-thirds of Europeans believe the cryptocurrency industry will survive in the coming decade.

In a research carried out by BitFlyer, one of the largest crypto exchanges in Europe, titled, “Crypto-Confidence-Index” a poll of over 10,000 respondents across 10 countries revealed the COVID-19 may have a part to play in the increasing optimism.

Over 66% of Europeans Believe in Crypto Longevity

The poll, carried out this March, reveals over 66% of the respondents believe crypto will still be around come 2030. This represents a jump from 63% in 2019’s report. The year on year growth shows the confidence that investors across the continent hold on cryptocurrencies despite the effects of COVID-19 in recent months.

The poll included citizens from France, U.K., Netherlands, Poland, Spain, Norway, Italy, Belgium, Germany, and Denmark.

Italy holds the largest belief of crypto surviving in the course of the next decade with 72% according to the respondents’ opinions. The country which suffered the most from the 2020 pandemic, raises a case for crypto transactions as the country remains in a lockdown period.

Spain, another intensively hit country by COVID-19 came in fourth in the rankings with 68% of the respondents believing crypto will be with us in 2030. Netherlands and Poland come in second with 70% of the total respondents optimistic on crypto.

The COO at BitFlyer, Andy Bryant appreciated the growth witnessed across the field and believes the current hard times may have a role to play in the growing optimism. He further said,

“Although we might look at this as an achievement for digital currencies in spite of the challenging economic times we are facing, it is also worth considering that this may well be partly because of these times.”

Bitcoin (BTC) as a Payment System?

However, Europe remains sceptical on the possibilities that Bitcoin (BTC), the top cryptocurrency, holds in the coming decade.

About 25% of respondents answered that they were certain that cryptocurrencies would still exist, but had no idea how they would be used, with this response being up 2% from 2019. Only 1 in every 10 Europeans further believe BTC will be used as a recognized payment currency in 10 years (9%).

Italy has the largest population of believers in BTC, with 12% of the respondents saying that BTC will be a major payment currency in the coming years, a 2% spike from 2019. The U.K, in contrast, are not as optimistic as only 5% of the respondents believe BTC will be around as a payment system in 10 years.

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Author: Lujan Odera

Crypto Futures Trading Volume Hits $2.1T, Spiking 314% in Q1 of 2020: TokenInsight Report

As per a recent report titled “2020 Q1 Cryptocurrency Derivatives, Exchange Industry Report” released by TokenInsight, the crypto derivatives market trading volume spiked to 314% in the 1st quarter of 2020 against the fourth quarter of 2019. The report suggested the futures trading volume in cryptocurrency realized $2.1 trillion.

The report further revealed that the trading volume of derivative market in Q1 of 2020 grew by 8 times when compared to the trading volume of first quarter of 2019. The report included futures trading volume from some of the well-known exchanges like BitMEX, KuMEX, Binance, Binance Futures, Deribit, Bitget, Huobi DMJEX, FTX, Gate.io, BFX.NU, Bitz, and OKEx along with several emerging derivative trading platforms.

The report also found that the average daily trading volumes for derivative products skyrocketed by 274% when compared to Q1 of 2019 and the trading volume peaked at $23.3 billion. The researchers behind the study commented,

“We believe the cryptocurrency futures have already possessed some attributes of market-leading indicators, and spot market participants can refer to futures trading volume for position management.”

Futures Trading Volume Correlation With Spot Trading Volume

The study revealed that the associated factor with futures and spot trading volume saw a significant drop and came down to 0.31 when compared to 0.76 registered in the 4th quarter of 2019. Researchers believe that the declined associated factor suggested that the futures trading market participant may have been acting independently of the spot trading market.

The research paper also suggested that when there is a spike in the futures trading volume the spot trading register significant fluctuation. The report explained,

“At this time, investors need to adjust their positions. Besides, in the market downturn, only when the future volume finally shrinks, the market may experience a meaningful rebound.”

Binance Emerges as the Biggest Player in the Futures Market

Binance, the leading crypto exchange by market volume has spread its operational portfolio significantly over the past year and its futures trading platform has emerged as the largest player in the space. Even during the recent market crash on March 12th which is now infamously known as the black Thursday crash saw Binance Futures emerge as #1 amid the sell-off spree.

The Black Thursday crash saw Binance Futures register daily trading volume at a whopping $2.8 billion.which was more than that of major players like BitMEX which registered $2.1 billion in daily trading volume and Huobi with $2.46 billion.

Binance has always maintained a lead in terms of trading volume and even during these troubled times, in the first quarter of 2020, Binance registered its all-time high trading volume which the firm revealed during its token burn event.

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Author: James W