Federal Reserve Chairman Jerome Powell to Speak About Digital Currencies Today

As part of a panel on “Cross-Border Payments—A Vision for the Future,” at the International Monetary Fund’s (IMF) annual meeting, Federal Reserve Chairman Jerome Powell will speak about digital currencies Monday.

The panel will start at 8 a.m. ET on Oct. 19.

During this virtual event, while discussing the potential solutions to enhance the cross-border payments, the “benefits and risks” of digital currencies and their macro-financial implications will also be covered.

“On Monday, Jay Powell gives his input on central bank digital currencies at the IMF talk listed above. Central Bank digital currencies are coming, and they will change everything… They are coming under stealth of X-border payments but it means so much more…” said former hedge fund manager Raoul Pal, CEO of Real Vision Group.

It is, however, not mentioned if Powell would be sharing his thoughts on a digital dollar.

Other panelists include Agustín Carstens, general manager of the Bank for International Settlements (BIS); Ahmed Abdulkarim Alkholifey Governor of the Saudi Arabian Monetary Authority; and Nor Shamsiah, governor of Bank Negara Malaysia with IMF Managing Director Kristalina Georgieva as the moderator.

You can watch live here:

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Author: AnTy

Coinbase Turned Over Info on 1,914 Users; 96.6% Were Criminal-based Law Enforcement Requests

As part of its commitment to be a trusted venue, Coinbase has released its first Transparency Report.

Much like other financial service providers and technology companies, Coinbase says it received requests from the law enforcement and government agencies seeking information and financial records in connection with civil, criminal, and other investigative matters in the form of subpoenas, search warrants, court orders, and other formal processes.

Because these requests are valid under the applicable laws, Coinbase must respond, wrote Paul Grewal, Chief Legal Officer at the San Francisco-based exchange, that currently serves over 38 million customers worldwide.

As per the report, the exchange received requests for information on 1,914 customers during the first six months of 2020. 58% of this request was from US agencies, and 16% was from state or local authorities like FBI, HSI, DEA, SEC, IRS, DOJ, and others.

Of the request, the majority, 96.6%, were criminal, while the rest was a civil or administrative type.

Overall, 90% of all requests came from just three jurisdictions — the US, UK, and Germany.

Coinbase Transparency Report
Source: Coinbase

“Great to see this transparency from coinbase. After some controversy re: privacy, this is a strong step forward,” said Jake Chervinsky, General Counsel at Compound. “Also worth noting, this comes from new CLO Paul Grewal (who I still think of as Judge Grewal), an extremely well-respected tech lawyer & big asset to the company.”

Coinbase also noted in the report they have been pushing back when appropriate; back in late 2017, they won against IRS over customer policy.

“I hope they’re pushing back on inappropriate gag orders as well,” said Jerry Brito, executive director of Coin Center, a DC-based crypto think tank.

“Glad to see Coinbase publishing a transparency report, joining companies like Kraken. Hopefully this becomes an industry standard,” he added.

More Reading: After US Secret Service, Coinbase Strikes a Deal with IRS to Sell its Data

Also Read: #DeleteCoinbase Trending After the Coinbase’s Deal with DEA & IRS Becomes Public

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Author: AnTy

Love it or Hate it, UNI Token Stands to Benefit from Uniswap’s Evolution

After releasing the UNI token as part of Uniswap V3, the first update for Uniswap V3 has been made on Github. It might say “trigger a new major release,” but for now, it just seems to be a tease with an IPFS deployment release.

Amidst the growing hype around Uniswap V3, such teases only push the market sentiments towards excitement, which in the DeFi world doesn’t take much to turn into euphoria.

For now, the UNI token is trading at $5.17, still in the green by 6.14%, slowly uptrending towards its ATH of over $8.

Today, with Ethereum Layer 2 solution Ethereum Optimism entering the first phase of its testament launch, Uniswap has announced itself as the early adopter, along with Synthetix and Chainlink.

Additionally, Mask Network rolled out a widget that lets users trade tokens on the biggest decentralized exchange (DEX) by volume, through its Twitter extension. The aim is to make it easier for Web 2 users to migrate to Web 3 apps.

The Question of Decentralization

The top DeFi project, with nearly $2 billion in deposits, is gaining a lot of attention these days thanks to its governance token, which was airdropped to its early adopters.

But not all of its is good; as we reported, there have been questions on the regulatory nature of the UNI token, which is also allocated to team members, advisors, and investors — Uniswap raised $11 million in a Series A round led by Andreessen Horowitz along with USV, Paradigm, Version One, Variant, Parafi Capital, SV Angel, and A.Capital.

At the time, it has been said the resources will be used to build Uniswap V3, which will “dramatically increase the flexibility and capital efficiency of the protocol.”

Besides the legal nature, the latest report from Glassnode also took a stab at the decentralized nature of the token launch, which raised a few questions.

“With the launch of its UNI token, Uniswap has branded itself as “decentralized,” but it still has a long way to go to reach this point. By giving itself a skeleton key to the protocol, Uniswap has (at least in the near term) sacrificed decentralization for the sake of control,” noted Glassnode.

But the crypto data provider also noted that the decision was “almost certainly” made with the protocol’s best interests at heart. Moreover, the control will gradually transition to the community.

“Despite the team’s lack of transparency and somewhat deceptive marketing, the UNI token remains a strong and likely extremely valuable asset,” combined with Uniswap’s impressive growth, V3 deployment in the pipeline, and activation of fee switch that will enable UNI holders to earn a portion of trading fees.

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Author: AnTy

UNI on the Move, Is Uniswap’s Governance Token Outside the Realm of US Securities Law?

Last week, the largest decentralized exchange (DEX) by trading volume, Uniswap, launched UNI as part of Uniswap V3. 400 UNI tokens were airdropped to every customer who used the platform before Sept.1st, 2020.

While some called this a “groundbreaking” token launch where customers were made the investors, some accused the project of catering to whales. Currently, UNI tokens are being held by more than 50,000 Ethereum addresses/wallets.

The token hit the peak above $8 last week only to lose more than 50% of its value during this week’s retracement. Today, UNI is back on the move, up about 25% at $4.81.

The liquidity on the popular DEX has also hit a new record this past weekend and continues to trade around $2 billion, since crashing following its copycat SushiSwap, sucking the liquidity. The volume on the exchange also sees growth, keeping above $400 million for the most part.

The community is now waiting for Uniswap V3, which will improve capital efficiency and tackle slippage. Project creator Hayden Adams has already raised the expectations of the community saying, it will be “sooo much better than all the things people are hoping it will be” and that Uniswap V3 “destroys every other AMM I’ve seen to date and it’s not even close.”

“We’re full steam ahead on V3, which is going to eat V2’s lunch,” said Haydens a few months back.

Meanwhile, what’s the legal nature?

Right at the genesis, 1 billion UNI tokens were minted, 60% of which will go to community members, 15% is already distributed through the airdrop. 21.51% will go to team members with a four-year vesting period the same as 0.69% to advisors, and the 17.80% share that goes to equity investors — Uniswap raised $11 million in June this year.

Being a governance token means, holders have control over company decisions. But with the launch also came the question if it is a security.

“There was no public solicitation for investment; it was a private offering to a few people,” is what Ethereum co-founder Vitalik Buterin has to say about this.

“If one were to also consider that the Uniswap team is well funded, backed by seasoned VCs who have most likely lent their legal, regulatory, technical and other expertise, one might also take a more careful consideration of the facts and circumstances of this particular offering and why Uni tokens may very well be outside the enforcement framework of U.S. securities laws,” wrote Phil Liu, the Chief Legal Officer at Arca.

Liu, who believes UNI tokens isn’t a security, in his argument that UNI tokens fall outside the US Securities Enforcement Framework, said the team didn’t raise money through a token offering and neither it is controlled by a central entity.

As a matter of fact, Uniswap is an open-source and fork-able network that puts the power directly into the holders’ hands.

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Author: AnTy

China Should Seize the ‘First Mover’ Advantages of Launching A CBDC: PBoC

China should aim at becoming the first country to issue digital currency as part of its efforts to internationalize the yuan and lessen its over-dependence on the world’s dollar-dominated payment system, the People’s Bank of China (Chinese central bank) said.

The commentary appearing in China Finance, a People’s Bank of China run magazine, opined that the rights and capacity to offer and control digital currencies is set to become the ‘new battlefield’ among various sovereign nations. The article also claims that issuance and the circulation of virtual currency will alter the current international financial system.

The article argues that China should aim at becoming a first mover in the digital currencies space and calls for the acceleration of the development of the country’s CBDC.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” says the article.

Also, the article argues that data feedback from a Chinese central bank-issued digital currency (CBDC) would be vital for the development of a national monetary policy, which is imperative for economic recovery in the post-pandemic landscape.

The article also revealed that PBoC’s digital currency research outfit had filed approximately 130 patents related to crypto applications touching on issuance, circulation, and implementation.

The People’s Bank of China’s research institute was founded in 2015 to look at the feasibility and implementation process of digital currencies, to reduce the costs of circulating fiat currency and enhance policymakers’ grip in the money supply ecosystem.

Last month, various state-run Chinese commercial banks embarked on large-scale piloting of the digital wallet, which is a step closer to the highly awaited official launch of the digital currency. PBoC revealed last month that about 400 million people are involved in the piloting program for a digital yuan.

The Chinese central bank is looking forward to using the digital yuan during the 2022 Winter Olympic Games.

The article concludes that digital yuan can help in breaking the dollar hegemony in the international monetary system.

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Author: Joseph Kibe

As Decentralized Finance Continues to Evolve, Big Four Audit Firms Will Play a Major Role in DeFi

Big four audit firms are set to be a significant part of the Decentralized Finance (DeFi) ecosystem according to the latest blockchain industry report by German-based non-profit, dGen.

The DeFi space, which has seen tremendous capital gains in TVL, will grow even more prominent in the coming decade as per dGen insights on its report. Jake Stott, the co-founder of dGen, noted that support from other financial market stakeholders would be inevitable going forward. Tom Howard, Chief Strategy Officer at Mosendo, said;

‘Over time, traditional financial institutions will have no choice but to interact with  decentralized finance tools, slowly disinter-mediating the industry from the inside out.’

Functions like verifying the authenticity of an invoice, tracking payment settlements, and insurance claims could occur faster with the help of a blockchain. Their role will be to act as an intermediary between DeFi and traditional finance.

Dubbed the ‘Decentralised Finance: Usecases & Risks for Mass Adoptionreport, dGen paid particular attention to the DeFi space. Currently, over $2.5 billion in funds is locked within DeFi based products. It is an area that has been hailed as the future of markets given almost all traditional assets are finding their way onto Ethereum based protocols. Though still at its infancy stages, dGen acknowledged this underlying potential in DeFi stating that it,

“could leapfrog the current FinTech industry, providing a new structure of financial services.”

Consequently, this optimistic narrative has gained massive support from across financial services, tech, and the academia elite. DGen’s researchers are bullish that the market could grow past the trillion-dollar mark by 2030. The report highlights that DeFi will: “Provide income for thousands of gamers, streamers, and influencers”

It will also be adopted by European financial institutions who will switch to offering “DeFi-enabled savings and pension accounts.”

A recent Q2 report by industry giant, ConsenSys, concurs on the possibility of a DeFi future given historical growth rates in the past three months. It goes on to detail that Bitcoin tokenization protocols and Yield farming frenzy are the fundamental factors behind this growth as per now.

While the DeFi space has emerged as an avenue to make better interest compared to zero percent in some jurisdictions, it continues to face security threats arising from the core infrastructures.

“Knowledge and security risks will continue to reduce, on top of a growing number of securities in the event of a hack. It appears the solutions the industry needs to scale will come from within the industry itself.”

The team is, however, optimistic the underlying issues might be resolved in as little as one year. Kain Warwick, Founder of Synthetix told dGen,

‘Insurance on DeFi is still extremely limited[…] DeFi still has significant tail risk, so insurance is likely to remain very costly in the short term, but as protocols mature, costs should come down[…] allowing for simpler and more useful insurance to emerge’.

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Author: Edwin Munyui

US Fed Chair Jerome Powell Rules Out The Private Sector in Creation of a Digital Dollar

Jerome Powell, the U.S Fed Reserve Chairman, has said that private entities should not be part of the creation process of a digital dollar. Appearing before the House Financial Services Committee on June 17, the Fed Chair highlighted that monetary policy functions should be left to the central banks regardless of the operating ecosystems.

On the digital dollar progress, Powell noted that the Fed owes it to the public to be up to speed with developments in the space. Consequently, the financial watchdog has emphasized understanding the intricacies of digital assets to evaluate their public good.

Private Entities Ruled Out of Digital Dollar Creation

Earlier this year, a digital dollar proposition was launched by the former CFTC Chairman, Christopher Giancarlo, together with other notable stakeholders in the financial services industry.

This recommendation had proposed private entities and the Fed to work together towards creating the digital dollar. According to the suggested layout, this digital currency would leverage the current U.S banking system to provide two-tiered services with the Fed’s backing.

This issue was raised as a question to Powell by Rep. Tom Emmer (R-MN) hence triggering the clarification on monetary policy functions. In his opinion, a collaboration with the private sector would invalidate the idea of the public good:

“The private sector is not involved in creating the money supply. That’s something that the central bank does. […] I don’t [think the public would welcome the idea that private employees who are not accountable solely to the public good would be responsible for something this important.”

Notably, Powell also addressed some shortcomings with the proposition of a digital dollar. One of the main concerns is striking a balance in what would be a fair oversight of the digital dollar.

According to Powell, there are a lot of questions when it comes to transactional privacy, which means it would be difficult to cap where the Fed’s control ends. However, he was keen to reassure the House Financial Services Committee that the Fed will not shy away from something beneficial to the world’s reserve currency, U.S. dollar.

China on Sunrise Phase

As the U.S continues to debate on the value proposition of a digital dollar, China has already launched a pilot for the digital renminbi (RMB). This initiative had been in the works for around five years and is quite promising, given China’s extensive use of mobile app payments such as Alipay and WeChat.

It, therefore, follows that a complete sweep up of fiat money within China’s economy in replacement with the digital yuan could soon be a reality. Despite this progress, China is not guaranteed to displace the U.S dollar as a reserve currency given its substantial market dominance. Also, the Euro is still significantly ahead of the CNY in FX markets.

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Author: Edwin Munyui

ConsenSys Codefi Staking Service Launches Institutional Testing Ahead of Ethereum 2.0 Launch

Binance and Huobi exchange are part of a six-institution team selected by leading Ethereum developer, ConsenSys, to test the upcoming ETH 2.0 staking service. The testing period will allow the developers to find the best iterations to enable the institutions to successfully conduct staking on Ethereum’s upcoming upgrade.

ConsenSys launches testing for Codefi Staking

ConsenSys backed, Codefi Staking project announced the release of its first ETH 2.0 staking-as-a-service platform to six institutions including Binance, Crypto.com, Huobi Wallet, Trustology, MaxiPort, and DARMA Capital. This is the first release of its kind with the platforms expected to return feedback on several components during the testing phase.

ConsenSys developers, led by enterprise-focused, PegaSys, built the Codefi Staking platform coding in Java programming language using Teku.

Speaking on the launch of the test phase, Tim Lowe, the project manager of the Codefi staking platform, expects feedback on users’ responses on the payments of rewards on the amount staked in ETH or fiat fee, custodial services’ security protocols once the ETH 2.0 proof-of-stake (PoS) launches, and finally the ease of API integration on the platform.

‘Enterprise focused platform’

The Codefi Staking platform is focused on providing a powerful ETH 2.0 staking platform to blockchain-based enterprises such as exchanges, custodial services, hedge funds, etc. Lowe believes ETH 2.0 holds a lot of potential, given the current demand for such services. Lowe said,

“I think anybody who is holding any crypto assets and is aware of Ethereum generally is starting to look at Eth 2.0 and staking. It’s still early but the interest is there across the board.”

The pricing is yet to be set for the institutions waiting to use the platform as a SaaS, Time Lowe said. However, the price will not be their selling point, Lowe explained;

“From a staking point of view, we are not going to be the cheapest, but we’re also not going to be the most expensive.”

Is Custodial staking good for users?

Codefi’s platform focuses on exchanges and custodians but some sections of the community believe better options are available. Binance currently offers staking services for a number of PoS coins including Tezos, Algorand, and Cosmos without the need to own a whole node.

The Codefi staking service is only focused on Ethereum staking, Changpeng “CZ” Zhao, Binance founder said. He hopes to replicate the user-friendly features on its staking such as “low fee staking or minimum staking amounts” into Ethereum staking. Speaking on Codefi’s test phase CZ said,

“Users deserve the rewards that their coins can earn them. With the eventual launch of Ethereum 2.0, we are excited to support staking for all of our ETH holders on Binance.”

Exchanges and custodians offer users a direct gateway into staking while allowing the use of assets to trade and transact without affecting the staking rewards.

Mirko Schmiedl, founder and CEO of Staking Rewards, however, holds a negative view on leaving the exchanges to fully control your staking. In addition to not having control over the governance decisions, “it’s not possible to store a staked asset on Binance and then use it as collateral in BlockFi or Maker to take out a loan,” Mirko said.

This increases the centralization of power over certain blockchains to exchanges beating the purpose of PoS governance systems.

‘Codefi staking rewards to come in two years’

Codefi Staking will be integrated into Ethereum’s “intermediate phase” allowing users to earn staking rewards before the official launch of ETH 2.0.

As the Eth 2.0 is in preparation to launch, an intermediate phase (“ETH 1.5”) will be adopted to ease the transition from the Ethereum 1.x version as the PoS system cannot be directly compatible with the old proof of work system. This phase of moving from ETH 1.x to ETH 2.0 will take approximately two years.

The rewards gained during the intermediate phase will be accessible to the users only upon the launch of the Ethereum PoS network.

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Author: Lujan Odera

‘Masked Hero’ Calling to ‘Buy Bitcoin’ Amidst the Peaceful Protests and Riots in the US

  • Bitcoin is taking an active part in the riots across America.
  • People are protesting since last week over the death of George Floyd, a black man who died while pleading for air as a white Minneapolis officer jammed a knee into his neck.

One protestor in the Los Angeles neighborhood talked about opting out of the current scenario by moving into bitcoin. He said,

“We live in a system that will not allow us to thrive. […] My macro solution for everyone is to opt out and exit the economy as a whole and the way we do that is by buying bitcoin.”

“Who is this masked hero?” enquired Jesse Powell, founder and CEO of cryptocurrency exchange Kraken on Twitter.

The protests erupted only recently but it needs to be pointed out that in the first five months of 2020, things weren’t going well either. People were under lockdown due to the coronavirus pandemic that resulted in unemployment soaring to nearly 24% with jobless claims since mid-March at a staggering 40.8 million.

While people are struggling to fed their family and pay their rent and mortgages, US Federal Reserve printed money and stocks are flying.

This wasn’t the first incident of bitcoin being highlighted during the protests either.

Earlier this week, another protester in Dallas carried a sign saying “Bitcoin will save us,” much to the ire of the people both from inside and outside the crypto industry.

Another one has been in Raleigh, North Carolina, where the poster of the protester read “Bitcoin & Black America” referring to the book authored by Isaiah Jackson.

Crypto industry has also been sharing its solidarity to the cause with Ripple CEO Brad Garlinghouse supporting those “who are fighting to save Black lives,” although he “can’t ever fully understand the pain of our Black community that recent and past events have caused.”

Bitcoin has been a part of protests in other parts of the world as well. Last year, the pro-democracy movement in Hong Kong supported the adoption of the digital currency. Also, in countries like Venezuela, Argentina, Chile, and others, cryptocurrencies played a role.

Markets Rising amidst the Chaos

For the first time in about a month, this week the price of bitcoin also jumped above $10,000 amidst the raging protests, although we are back to $9,500.

But bitcoin isn’t the only one, while many cities are on fire in the US, the S&P 500 enjoyed its greatest 50-day rally in history while struggling with the coronavirus pandemic.

If history is any indication, these 37.7% returns would further expand in the days ahead.

The reason behind this disconnection between the stock market and the economy is the trillions of dollars injected into the market by the Federal Reserve and government. Trader and economist Alex Kruger said,

“Europe sharply reducing political tail risk, Japan fiscal package 40% of GDP, China fears overdone as Trump steps back, economies reopening, US riots The market has spoken. Hence why so much green.”

But the widespread civil rest in the US could act as a headwind for stocks. Currently, bitcoin is trading at above $9,600 and is expected to hit $20,000 this year.

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Author: AnTy

Albania’s Parliament Approves ‘Comprehensive’ Crypto Bill into Law, Joining France and Malta

  • Albania’s parliament has signed a new ‘comprehensive’ crypto bill into law on May 21 as part of its approach towards a legal framework for the industry.
  • It will now join the likes of Malta and France among the countries with the most advanced crypto laws in Europe.

The bill was first introduced to Albania’s Committee of Economy back in 2019 in a bid to create legislation around crypto activities. Dubbed the ‘law on Financial Markets Based on the Technology of Distributed Ledgers’, it was approved yesterday with a majority of 88 votes against 16 with only 3 in absentia.

The New Albania Crypto Law

Anila Denaj, Albania’s Minister of Finance and Economy, is the one who presented the draft law. Following the milestone, she highlighted that:

“The draft law aims to regulate the conditions for licensing, exercising the activity of operators and stock exchanges and supervising them, as well as preventing abusive practices in the market, where severe fines are stipulated for anyone who violates the provisions of the law.”

Notably, the law will also be used to combat money laundering, which has thrived in the crypto market in recent years. In fact, International regulatory bodies like the FATF have already implemented regulations such as the ‘travel rule‘ to ensure proper KYC/AML practices in crypto operations.

Crypto Law Advancements

This volatile market remains quite grey in most parts of the world. However, some countries such as Japan have been touted as leaders in crypto regulatory frameworks.

The Asian superpower recognized Bitcoin and other digital assets to be legal as early as April 2017. In addition, crypto exchanges are also legal provided they register with the Financial Services Agency (FSA).

Other than Japan, the European Union also introduced the 5AMLD (Fifth Anti-Money Laundering Directive) which came into force in early 2020.

These advanced guidelines basically provide clarity on the ambiguity that existed within digital asset logistics. Crypto Exchanges and digital wallets are also highlighted as part of the exposure avenues to money laundering activities.

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Author: Edwin Munyui