The UK to Lead in New Tech “Stablecoins & CBDCs” Following EU Departure: Chancellor

Chancellor Rishi Sunak said on Monday that to maintain certainty and stability for firms in the UK following its departure from the European Union, they will be

“leading the global conversation on new technologies like stablecoins and Central Bank Digital Currencies.”

For this, the UK will extend its leadership in financial technology, which means remaining at the forefront of technical innovation. Here, Sunak mentions new technologies such as stablecoins, the privately-issued digital currencies which

“could transform the way people store and exchange their money, making payments cheaper and faster.”

However, to harness these benefits, the government will propose a regulatory approach that ensures these stablecoin initiatives meet the same minimum standards as other payment methods.

On the topic of central bank digital currencies, the UK wants to take a “leading role in the global conversation.”

The Chancellor also welcomed the research done by HM Treasury and the Bank of England on whether or how to issue their own digital currencies, which will be “complement to cash.” Sunak said,

“Our plans will ensure the UK moves forward as an open, attractive, and well-regulated market, and continues to lead the world in pioneering new technologies and shifting finance towards a net-zero future.”

In this future of UK financial services, the Chancellor of the Exchequer further emphasized green finance, reforms to the UK listings regime to “attract the most innovative and successful firms,” and to launch a Call for Evidence on its overseas regime.

Additionally, to have the UK’s first Long-Term Asset Fund launch within a year to encourage investment in long-term illiquid assets, such as infrastructure and venture capital.

The idea is to position the UK as a global financial hub by ensuring regulation enhances the UK’s attractiveness to businesses.

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Author: AnTy

LocalBitcoins Show Strong Transaction Volume Despite The Recent Regulatory Clampdowns

Bitcoin peer-to-peer decentralized marketplace, LocalBitcoins, has continued to maintain steady volumes despite the change in policies around the world that now require the user to complete a KYC procedure and even banned cash transactions.

The policy change was undertaken in accordance with new European anti-money laundering directives. In fact, the policy change was made in June 2019 and people thought it would really hamper the business and customer inflow.

However, the data suggest that policy changes didn’t really have any negative impact on the peer-to-peer exchange’s volume. In fact, the trading volume on the platform is well on-par with centralized exchanges such as OKEx and Coinbase, as per a data set from Nomics.

The data set revealed that in the past 12 months, OKEx and Coinbase have seen a volume drop of 30% and 45% respectively, while LocalBitcoins in the same time frame saw a decline of 27% which is less than both the prominent exchanges.

One of the spokespeople from the peer-to-peer exchange revealed that cash transactions on the platform were minimal and constituted only 0.5% of the total volume on the exchange. Thus removing the cash transaction option did not really have any long-lasting impact.

LocalBitcoins was created back in 2012 as a peer-to-peer exchange where anyone can buy/sell their bitcoins without the need to create an identity-based account, The main motive was to avail banking and financial services to the underprivileged who cannot get access to banks.

Developing Nations With Financial Troubles Contribute Largest to the Volumes

LocalBitcoins registered elevated transaction volumes from developing nations that are facing financial troubles due to various reasons. For example, transaction volumes recorded from Argentina, Colombia, and Venezuela have risen by 51%, 46%, and 125% respectively in the past couple of months.

Thus, it is quite clear from these statistics that LocalBitcoins volume hasn’t degraded after the policy change which many believe would bring the platform’s doom. In fact, since the policy change, the exchange has managed to keep its trading volume in-line with mainstream centralized crypto exchanges These statistics also prove that people do not really care about privacy for as long as they get to trade bitcoin.

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Author: Silvia A

How will Bitcoin Halving Affect Miners’ Profitability

  • To maintain healthy profit margins for miners, a rising hashrate is needed while newer and more efficient mining devices to reduce mining costs
  • Before halving the gross cost to mine one BTC is $6,851 and after halving $15,062 and much lower for large scale commercial mining pools like Bitmain

Bitcoin reward halving is less than 100 days away, scheduled to occur in Mid 2020 that would see the new issuance supply of bitcoin declined by 50%. With this supply reduction, there would be changes in the breakeven cost to mine bitcoin before and after the halving.

Digital currency research company TradeBlock tries to find “bitcoin mining profitability following ‘The Halving’ and its indication for price in its latest blog.

Maintaining healthy Profit Margins & Reducing Mining Cost

In 2019, commercial mining operators were operating at “healthy profit margins,” as the price of BTC jumped throughout the year.

The network hashrate meanwhile, continued on its record run, making new highs each week as the number of resources committed to secure the network rises. But as the resources rise over time, efficiency and mining costs rise as well.

To maintain healthy profit margins for miners, a rising hashrate is needed to correspond with a rising bitcoin price while to reduce mining costs, newer and more efficient mining devices are continuously being developed.

Miners expecting the price of bitcoin to rise to higher levels?

The decentralized peer-to-peer network is secured by miners who receive 12.5 bitcoin for mining each block. Currently, 144 blocks are mined on average per day that results in 1,800 new BTC per day. After the halving, the mining reward will decline to 6.35 bitcoin per block, resulting in 900 new bitcoins mined per day.

Before the halving, the gross cost to mine one BTC at current levels with current device types are estimated by TradeBlock at $6,851. Meanwhile, the BTC price is trading at $9,800.

After the halving, assuming the hashrate will continue to rise over the next three months at the same rate it has been for the past three months and commercial operators transition to newer models for 30% of their rigs, the cost to mine one BTC would be $15,062.

If instead of rising to ~135,882,500 TH/s on halving day, the hashrate remains flat, the cost would fall to $12,525. However, for large scale commercial mining pools like those operated by Bitmain, the largest manufacturer of mining rigs, will have even lower breakeven cost.

The breakeven costs, TradeBlock says indicates miners continue to increase towards which suggests miners are “likely expecting the price of bitcoin to rise to higher levels,” above $12,000-$15,000 around the halving to continue to generate a profit. In contrast, it is also likely they will reduce resources following the halving that will result in a decline in hashrate as profitability falls.

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Author: AnTy