NYDFS Approves Internet Giant, GMO, to Offer The First Japanese Yen (JPY) Pegged Stablecoin

NYDFS Approves Internet Giant, GMO, to Offer The First Japanese Yen (JPY) Pegged Stablecoin

Tokyo-based internet conglomerate, GMO Internet has been cleared by New York Financial Services (NYDFS) to provide two stablecoins; a Yen-pegged stablecoin (GYEN) and a dollar-pegged stablecoin (ZUSD).

The NYFDS allowed GMO Internet to set up a limited purpose trust company, GMO-Z.com which will issue the two stablecoins. In order for the company to gain approval, it had to meet various strict rules from the NYFDS and also adhere to the federal anti-money laundering (AML) rules and economic sanctions.

Although there are various regulated stablecoins, there aren’t any pegged to the Japanese yen. In this case, GMO Internet becomes the pioneer company to issue the world’s first JPY-pegged coin.

According to the company, both ZUSD and GYEN stablecoins can be bought and redeemed using GMO-Z.com. The two stablecoins will be powered by the Ethereum network and will be available from Jan. 2021. The firm also clarified that the two stablecoins will be available to both institutional and individual clients and are ideal for trading, payments, hedging, settlements, and arbitrage. GMO-Z.com Trust Company’s SVP of business development, Kurt Bierbower, explained further,

“We seek to dramatically reduce execution times and expand the digital options for retail and institutional clients in trading, settlements, payments, lending and remittances.”

GMO Trust also stated that it had entered into strategic partnerships with various global virtual asset exchanges to guarantee the liquidity of the digital currencies. Bierbower also clarified that the firm started to develop GYEN in 2018. However, the two stablecoins will not be offered in Japan.

The licensing means that GMO is one of the 27 firms that are regulated to engage in digital currency activities in New York.

GMO has been in the crypto space for a couple of years. The firm owns a licensed crypto exchange operating in Japan and also a Bitcoin mining outfit. The company also states that it runs the globe’s biggest online forex trading outfit apart from their main internet services business. The firm also has an Internet bank that is regulated by the Japanese Financial Services Agency (FSA).

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Author: Joseph Kibe

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

Gemini Partners with ClearBank to Provide Banking Services for UK Exchange Users

In September, U.S.-based Gemini announced its intentions to expand fully into the U.K., to offer trading and custody services. It seems the crypto exchange is now turning its words into action.

Today, cloud-based clearing bank Clearbank announced that it had become the UK banking services provider of top crypto exchange and custodian Gemini.

ClearBank will provide its single API integrated secure infrastructure for Gemini, including securing sort codes and dedicated account numbers. It will also offer express access to payment mediums like CHAPS and Faster Payments.

There have been increased numbers of crypto holders in the U.K., especially now that there is uncertainty regarding the stability of the dollars after Brexit.

The U.K. Financial Conduct Authority (FCA) recently revealed more than 1.9 million holders of crypto assets.

Last month, Gemini rolled out its full services in GBP after receiving an Electronic Money Institution (EMI) license from the FCA.

The license and the present partnership with ClearBank will enable Gemini U.K. customers to deposit or withdraw their GBP balances through the bank. Gemini is offering its customers a secured ClearBank API platform for the complete safety of their accounts.

Apart from protecting the account of the users, Gemini will also maintain the highest regulatory compliance.

Partnership with address issues consumers are facing

ClearBank chief executive officer Charles McManus says the bank is happy to be chosen as Gemini’s banking partner. He pointed out that Gemini has proven that it’s a market leader in the exchange industry over the years. The crypto exchange is also one of the first the bank has worked with, confirms McManus.

In the deal, the role of ClearBank is to provide payment rails and access to accounts, which will help Gemini deliver the best customer experience. He revealed that the partnership aims to help address some of the biggest issues consumers have faced in the industry.

Head of Gemini UK Blair Halliday also commented on the development. According to him, its customers’ high needs in the U.K. have prompted the need to opt for ClearBank as its official banking partner for its U.K. customers.

He said customers in the U.K require fast and easy access to their funds at all times. With faster payment methods, it grows the relationship with customers, and that’s exactly what Gemini has set out to achieve.

Blair also said its shared innovative technology with Clearbank makes the arrangement possible. He pointed out,

“With our shared focus on rigorous compliance, robust security, and innovative technology, ClearBank is an obvious partner for Gemini.”

As cryptocurrencies increase in popularity in the U.K, consumers are always exploring faster and more efficient methods to store their funds.

As a result, users of trading platforms should instantly fund their accounts without being forced to pay extra FX charges. They also want to know their funds are safe and secure, which can only be achieved with a high-risk management standard. Gemini said by choosing ClearBank’s banking services, it hopes to address its customers and crypto holders’ underlying needs.

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Author: Ali Raza

FinTech Revolut to Leverage Fireblocks’ Wallet & Network Tech to Launch New Crypto Services

Revolut, the mobile-only trading app, has announced that it would be utilizing Fireblocks’s technology to offer a new range of crypto services. Fireblocks is popular for helping big institutions to shift cryptocurrencies between exchanges. However, neither of the two firms revealed exactly what these new crypto services would be.

Fireblocks currently support three exchanges, namely Huobi Global, OkCoin, and Bithumb. Big companies use Fireblocks technology to move funds between smart contracts both on and off-chain without logging in and out of each exchange.

Revolut started as a mobile banking service offering cross-border remittance services starting in 2018. In the beginning, the mobile banking app allowed only the purchase and sale of bitcoin; however, now it offers multiple digital assets.

Revolut this year expanded to the US as well, which expanded its user base significantly. It is being believed that its recent association with Fireblocks is only going to help it scale its crypto services further.

As per Revolut’s yearly financial report released in August this year, the customers on the mobile banking app held $121 million in crypto by the end of 2019, seeing an increase of 2.5 folds from 2018. In the financial year of 2018, the total amount of crypto held by the mobile banking service stood at $48 million.

Ed Cooper, Revolut’s head of crypto, commented on their association with Fireblocks but did not reveal any detail of the partnership and how both the firms plan to scale bitcoin services.

“Fireblocks will enable us to add more advanced crypto features rapidly, ” they are also exploring “all the new experiences that we can offer our customers shortly.” He added,

“Wish I could give more info here. They haven’t announced the services yet, but Revolut is planning to announce this themselves in the next few weeks.”

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Author: James W

Switzerland-based Atupri Is the First Health Insurance Company to Accept Bitcoin & Ether

Atupri, a health insurance company in Switzerland, is the first such company to offer its user’s policyholders the option to pay bills with cryptocurrency.

The company currently accepts the top two cryptos, Bitcoin (BTC) and Ether (ETH). It further mentions that the transaction fees, so-called miner fees, is the only cost to be paid. Also, they do not yet offer the option of repayments in cryptocurrency.

Starting August 31, 2020, the crypto options have been allowed.

The crypto payment addition is part of the company’s comprehensive digital strategy and “one of many aspects to optimize our service and to offer our policyholders the greatest possible comfort.”

The payments in digital assets are made through the payment system of Bitcoin Suisse AG (BS), a financial intermediary domiciled and registered in Switzerland, which is a member of the self-regulatory organization VQF recognized by the Swiss Financial Market Supervisory Authority (FINMA).

It is BS that bears the risk of price fluctuations in digital assets. Atupri clarifies that it doesn’t share any data with third parties and that they only send the invoice number to BS. The translated version reads,

“The original claim and the related invoice is in Swiss Francs (CHF). The customer’s payment to BS in cryptocurrency via the system provided leads to a debt-discharging effect. The customer can settle the claim in CHF at any time up to the time of payment with cryptocurrency.”

In its FAQ section, Atupri also briefs that to pay bills with BTC or ETH, one just needs a crypto wallet. It also mentions that paying with bitcoin involves electricity consumption, but it is “negligibly small” compared to the energy consumption of the “traditional” monetary system.

And with computers becoming more and more efficient and the use of renewable energy becoming more widespread, “this difference will become even bigger,” it states.

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Author: AnTy

Gemini and Crypto Investing Platform Blockchange Collab on RIA Trading & Custody Services

  • Gemini crypto exchange collaborates with Blockchange Inc. to offer trading and vault solutions to the registered investment advisors (RIA).
  • The RIA will be able to securely manage their clients’ portfolios focused on digital assets. The Quantum Capital management will onboard as their first client

News has now emerged that the Gemini crypto exchange will extend trading and vault services to the registered investment advisors (RIA). The announcement was made today via their official twitter page.

The Winklevoss-led crypto exchange has unveiled a strategic partnership with the digital asset investment platform, Blockchange Inc. This is a platform that offers wealth managers, and advisors access to manage their clients’ entire portfolios easily. The collaboration will integrate Blockchange’s BITRIA professional-grade portfolio management capabilities with Gemini’s vast exchange solution.

According to Dan Eyre, Blockchange’s CEO, Gemini, was the perfect partner for the solution due to their status as the only qualified exchange assets custodial providers. This ensures that only the custodian retains the clients’ funds, which has been stipulated as a prerequisite to utilize the RIA solution.

Gemini COO, Noah Pearlman, reiterated that developing investor solutions with requirements and input from wealth managers and advisors could only work to encourage other investors to onboard the vast digital assets network.

Notably, the wealth management group, Quantum Capital Management, is the first institutional client to onboard the solution. They boast of having at least $125 Million in assets under their administration. This will give their clients ease as they look to broaden their customer’s portfolios with more popular digital assets coming up and available on the Gemini crypto exchange.

The Quantum CIO Howard Aschwald has highlighted the significance of risk-adjusted returns, and the potential of digital assets could not be ignored further. Adding that they owed their clients the very least a small allotment. Despite weighing some of their options: Hedge funds, Investment trusts, and index funds, they concluded that the Gemini solution was the most flexible and best suited to fulfill their needs.

“It allows us to implement, at scale, our Digital Asset Management Strategy improving liquidity and control over risk management.”

Impressively, the crypto exchange recently extended support for three additional fiat currencies. They now feature the Canadian Dollar, Australian Dollar, and Hong Kong dollar on their platform as they seemingly look to expand their global presence, particularly into the Asia Pacific region.

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Author: Lujan Odera

Bitmain’s Ousted Co-Founder Proposes Share Buyback at $4B Valuation; Wu Acted ‘Illegally’

Bitmain’s power struggle may be at an end, should the Jihan Wu team accept a buyback offer by Micree Zhan. According to a recent letter by the recently ousted Bitmain Co-CEO, he is willing to buy Wu’s shares at a company valuation of $4 billion. This comes as the control battle for Bitmain intensifies after Zhan regained the Beijing office earlier this month.

The alleged Zhan letter – which was first shared on Chinese media – highlights that Wu acted illegally during the ousting process. Zhan owns 36% of Bitmain’s shares, making him the largest shareholder.

Consequently, he enjoys majority voting rights of up to 60%; hence any decisions without Zhan’s consent are considered ‘illegal.’ While this is the case, Zhan was still ousted after Wu claimed to have held a shareholder meeting in the Cayman Islands. Zhan has since condemned the move as illegal based on Bitmain’s shareholder structure and voting rights:

“WITHOUT MICREE’S CONSENT, NO ONE CAN CHANGE THAT LEGALLY. BUT JIHAN FORGED A SHAREHOLDER’S MEETING RESOLUTION SAID HIS 10X VOTING RIGHT NO LONGER COUNTS, AND FIRED MICREE AS THE COMPANY DIRECTOR. BUT MICREE SAID IN THE ANNOUNCEMENT, THAT SHAREHOLDER’S MEETING NEVER HAPPENED.”

A Response to Bitmain Hong Kong

Zhan’s response has coincided with Bitmain Hong Kong’s move to cut Beijing from its chips supply chain. The Hong Kong headquarters, and also in charge of Bitmain Beijing, reports to the Cayman Islands holding entity but is currently controlled by Wu’s team. The subsidiary posted on its website that it is suspending chip supplies to Bitmain Beijing following Zhan’s takeover:

“Bitmain Hong Kong has suspended the chip supplier for the time being to Century Cloud Core, which is now controlled by Zhan’s relatives, until we are assured, through negotiation with Zhan’s relatives, that they are committed to protecting the interest of Bitmain’s customers and the company as a whole.”

This supply chain war, however, seems to have started earlier when Zhan took the helm of the Beijing office. The ousted CEO interfered with the supply of mining equipment from Bitmain’s Shenzen factory to clients, an issue that forced Wu’s team to clear the air noting that all is well.

Since then, tensions have been high given the events that unfolded during the Beijing office takeover, coupled with pending legal battles in Hong Kong and the Cayman Islands.

Bitmain’s Value Sliced Significantly

As one would expect, uncertainty caused by Bitmain’s control brawls has affected the company’s value.

Just two years ago, its valuation could have gone as high as $14 billion as it prepared to launch an IPO. Today, the value was reduced by over half and might be heading towards the $1 billion recorded during Bitmain’s Series A funding back in 2017. However, if Zhan and Wu agree, Bitmain could regain its glory days.

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Author: Edwin Munyui

Ryde Car-Pooling App in Singapore Adds Bitcoin Payment Support Via An Integrated Wallet

Ryde, a popular car-pooling service in Singapore, has become the first application of its kind to offer bitcoin payment support.

In its announcement made on Wednesday, claimed that Ryde users would be able to deposit or top-up up to $899 in the Singaporian dollar, which would convert to the native Rydecoin without any conversion or transaction charges. The company also claimed that it is the only app that allows customers to pay in Bitcoin from within the native e-wallet.

Terence Zou, CEO of Ryde, claimed that adding Bitcoin payment support was a long-due process and was just a matter of time before it got added. He also mentioned that they had seen a significant boost in their transaction volume, which was one of the critical reasons behind adding Bitcoin payment support. He explained:

“I have been watching the developments of this particular space, and increasingly I’m sanguine about the prospects of cryptocurrency and its usage.”

Ryde might be the first car-polling service to add a Bitcoin payment facility from within their e-wallet. However, the Fold App was the first car-pooling service to introduce bitcoin as a micropayment via the lightning network. It allowed users to pay for rides in Bitcoin through an integration. Ryde, on the other hand, enables bitcoin payments from within the native wallet of the app.

COVID-19 Played a Major Role in Rolling Out Bitcoin Payments With Ryde

Ryde began working on a Bitcoin payment integration to its native wallet app back in 2019 when almost 60% of the Singaporean population was still dependent on cash transactions.

However, the outbreak of COVID-19 helped the car-pooling service accelerate its Bitcoin payment integration as people started avoiding cash transactions in fear of contracting the virus resulting in high demand for cashless transactions.

Ryde seized the opportunity and accelerated development. And that decision seems to have paid off as the firm announced the bitcoin payment integration on Wednesday.

Singaporean Government Trying Hard to Lure Crypto Firms to the Country

Singapore, considered among the most crypto-friendly nations, which is evident from the fact that it’s tied with the United States for third place for the highest number of crypto exchanges as per a recent report released by Crystal Analytics.

However, Zou mentioned that Singaporean people have access to bitcoin but through limited exchanges and ATMs, and it is still not widely accepted by merchants across the country.

The government is trying to change that through better regulations, it recently amended its Payment Service Act 2019, where it allowed prominent exchanges like Coinbase to operate in the country for a specified period. The amendments came into effect from January this year.

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Author: James W

MoneyGram to Offer Direct Deposits in India Via Federal Bank; Both Members of RippleNet

MoneyGram will now offer direct deposits to India following its partnership with Federal Bank, one of the leading financial institutions in the country. According to a recent announcement by the payment system service provider, this alliance will be strategic in offering its Indian clients an account credit option via the Federal Bank. The MoneyGram announcement reads,

“Through this partnership, millions will be able to receive deposits directly in their bank accounts without leaving the confines of their homes which is imperative in the current situation.”

As highlighted, this milestone is expected to further assist in COVID-19 mitigation following the ‘new normal’. Most economies have moved towards e-payment networks in a bid to keep the virus at bay. Given this situation, the alliance between MoneyGram and Federal Bank is especially important.

Furthermore, World bank stats indicate that India continues to dominate the global remittance market with 2019 recording over $82 billion. Notably, Federal bank enjoys 15% of this market and is therefore expected to significantly boost the partnership. MoneyGram’s Chief Revenue Officer, Grant Lines, echoed that they are confident of the value proposition by Federal Bank,

“Federal Bank is known throughout India as a pioneer in digitizing financial services, and we’re proud to partner with them to enable millions of people the option to receive money directly into their bank account.”

MoneyGram’s Venture in Ripple for International Remittances

Ripple, popularly known for its remittances service based on RippleNet, had already began working with MoneyGram. The two got into a partnership back in June 2019 which spiked hopes of MoneyGram leveraging a blockchain based platform for its payment services. This is, however, yet to happen despite the market adrenaline at the time.

In a recent Q1 earnings call, the CEO of MoneGram, Alexander Holmes, said that the quarter had been quite slow for the partnership. Nonetheless, they have some work in progress and boasted of the future prospects,

“We also have a variety of new services in the pipeline and things that we’ll be rolling out, and expanding with later this year…. But from a capability perspective from a service quality and from a performance, it’s been a really good — been a really good quarter.”

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Author: Edwin Munyui

FSA Registered SBI Holdings Backed Crypto Exchange FXcoin Ready to Start Trading

The Japanese crypto exchange FXcoin Ltd. is now planning to offer trading services as Bitcoin makes a recovery after coronavirus-fueled turmoil.

In March, Bitcoin recorded one of its biggest drops of about 50% by falling to $3,850. Since then, we have recovered over 85%, currently trading just under $7,200.

As we reported, in the past month, despite the violent sell-off, retail investors flooded in to buy the dips. Bitcoin whales are also surging to 2017 levels while long-term investors are increasing their positions and accumulating more BTC.

A previous Deutsche Bank AG veteran is ready to begin offering BTC transactions on their platform next month, with these signs of market restoration, and over 2 years after it was founded, reported Bloomberg. FXcoin just began approving requests from potential clients that want to open new accounts.

Planning for the Future

FXcoin, funded by SBI Holdings Inc. is one of the 23 crypto exchange operators that are enrolled with the Financial Services Agency (FSA) after Japanese authorities began securing industry failures from several hacking incidents in the country.

Currently, the company has about 36 staff members and hopes to add more employees to around fifty by the end of 2020 and hopes to begin gaining in profits by the end of 2021.

FXcoin also has future visions of growth by adding more affiliates of SBI Holdings including Litecoin (LTC) and Ripple (XRP).

The company is planning to eventually build a swaps market to allow investors to hedge against the high volatility persistent in the market.

Bullish on Digital Currency Prices

During the recent sell-off, however, Bitcoin was not the only one affected by the coronavirus pandemic, the world markets were hit and now a recession seems very likely.

However, central banks have injected liquidity into the market and announced trillions of dollars worth of stimulus measures in an effort to battle the economic backlash by firing up their money printers. According to FXcoin’s CEO Tomoo Onishi,

stimulus measures to fight the economic fallout from the pandemic will flood global markets with cash, causing some money to flow into digital currencies.”

Despite Bitcoin plunging in line with conventional assets and putting a question mark on its safe haven status, Onishi is “bull on virtual currency prices.” He also said “There is no asset that’s absolutely safe,”  and “there is evidence that digital currencies don’t move in tandem with conventional assets over the long term, making them worth including in a portfolio to diversify risks. “I’m a bull on virtual currency prices,” he said.

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Author: AnTy