China’s Digital Currency to Roll-Out In A Second City After Successful Trials In Shenzhen

  • The second city in China is launching a lottery to test its digital currency/electronic payment (DC/EP) project, a local report states.

On Monday, local Chinese media The Paper reported that the district of Suzhou in Xiangcheng would launch a lottery to give away the country’s central bank digital currency (CBDC) in a bid to test the real-use cases of the digital currency. The ‘red envelop’ lottery is set to launch on December 12th across the city, a date known as Double 12 across China, and an end-year shopping festival.

The report said the lottery would be released similar to the one carried out in the city of Shenzhen in mid-October. In Shenzhen, the endeavor was a highly successful one, with over 50,000 participants winning 200 digital yuan each – totaling approximately $1.5 million. A later report confirms that over 95% of the digital yuan distributed were used in two weeks, stretching to over 3000 stores that accept the digital currency.

The city was chosen given the large prevalence of installed near-field communication (NFC) and QR code point-of-sales across merchant stores. Suzhou’s DC/EP trial is also set to introduce several new features not used in Shenzhen’s trial phase, such as the offline payment feature and the smartphone touch functions.

China’s DC/EP project will also launch a trial in Chengdu, which is preparing in anticipation by installing the NFC and QR codes point-of-sales. The People’s Bank of China (PBoC) also announced plans to launch the DC/EP project in the Winter Olympics venue in 2022.

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Author: Lujan Odera

Cybersecurity Firm, CipherTrace, Files Second Patent for Tracking Privacy Coin Monero (XMR)

  • A cybersecurity firm, CipherTrace announced on Monday their second patent on tracing and tracking privacy-enabled cryptocurrency, Monero (XMR)

A press release shared to the BEG news desk confirms CipherTrace, a blockchain analysis, and cybersecurity firm, has filed its second “Monero tracing” patent – “Techniques and Probabilistic Methods for Tracing Monero.” The patent follows the firm’s registration of the “Systems and Methods for Investigating Monero” patent earlier in the month in a bid to trace and track the privacy-enabled cryptocurrency.

Over the past few years, regulators and governments worldwide, including the United States and Russia, have been working on solutions to tracking XMR. According to the statement, over 45% of the darknet transactions are completed using privacy coins – with Monero leading the line, only second to Bitcoin (BTC).

Monero gives the user total anonymity through a privacy-by-default blockchain, unlike other privacy-based blockchains, ensuring no user can be deliberately or accidentally be traceable.

In September, the crypto intelligence firm announced a partnership with the U.S. Department of Homeland Security to develop a forensic tool to track and trace Monero. At the time, CipherTrace CEO Dave Jevans confirmed the product has been in the works for a year stating,

“Our research and development team worked for a year on developing techniques for providing financial investigators with analysis tools. There is much work still to be done, but CipherTrace is proud to announce the world’s first Monero tracing capability.”

The latest patent will allow CipherTrace to build unique solutions and a toolkit to help regulators and law enforcement officials easily trace private cryptocurrency. The patent covers many features, including forensic tools to explore the XMR transactions, statistical and probabilistic methods to clustering likely owners, transaction visualization tools and methodologies for gaining intelligence about XMR transactions and node operators, etc.

This will exacerbate money laundering across the virtual asset service providers (VASPs) such as crypto exchanges and custodial services. Monero’s privacy makes it difficult for these VASPs to take on the compliance risk due to the high possibility and risk of money laundering. Over the past year, several exchanges have delisted XMR due to these challenges, including OKEx, Upbit, and recently Switzerland-based ShapeShift.

While CipherTrace works to remove the anonymity that cryptocurrency assets offer, the privacy of the crypto users’ identities will not be disclosed, the statement reads.

“We do, however, identify the Virtual Asset Service Providers (VASPs) that are commercial companies operating cryptocurrency businesses.”

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Author: Lujan Odera

US Household Net Worth Rises to a Record $119 Trillion Level in Q2

The net worth of American households and non-profit organizations surged in the second quarter to the highest level ever, thanks to the rebound in stocks and fiscal stimulus following a record drop in the previous quarter.

Household net worth increased by 6.8%, or $7.6 trillion, to a record $118.96 trillion, according to a Federal Reserve report. This was the largest quarterly gain since 1952. This is also about $380 billion more than the net worth at the end of 2019.

This increase came despite a record drop of $7 trillion in the previous three months, quarter first, caused by an economic shock from the COVID-19 pandemic.

During the same period, the level of federal government borrowing also soared as lawmakers responded with massive fiscal relief. Additionally, the value of equities increased $5.7 trillion from the prior quarter, while real estate advanced about $458 billion.

In the first quarter, the pandemic and the subsequent shutdowns sent the economy into a recession, which was the deepest since the 1940s. This resulted in a record decline in the household net worth in the first quarter of 2020.

Since then, the economy has been seeing a gradual recovery. Not to mention, the S&P 500’s quick recovery to pre-pandemic levels in mid-August and fresh highs this month. While the Dow Jones Industrial Average remained about 1.5% away from its February peak, Nasdaq jumped 23% higher than the previous ATH.

However, not every American benefited from this growth, as about 45% of the US population doesn’t own equities, according to a June 2020 survey from Gallup.

In the second quarter, in comparison, Bitcoin recorded over 42% returns.

The housing sector also experienced a V-shaped recovery as pent-up demand and record-low mortgage rates boosted sales, but again, one-third of households don’t own a home.

Consumer credit excluding mortgage debt decreased $69 billion during the pandemic, for the first time in four years.

Low-interest rates that the Fed has announced to keep near-zero through 2023, meanwhile bolstered corporate borrowing during this period. While firms’ debt increased at an annualized rate of 14%, federal debt outstanding swelled at a rate of 58.9%.

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Author: AnTy

Tether to Add Layer 2 Solution, ZK-Rollups, to Reduce Congestion On Ethereum’s Network

Tether announces plans to integrate ZK-Rollups, a second layer solution using zero knowledge proofs to bundle up transactions as one to reduce the burden on Ethereum-based USDt transactions. Integration of Layer 2 solutions is becoming an ever growing concern for Ethereum users after the recent spike in gas fees in tandem with DeFi market growth.

ZK Rollups is an implementation built on top of the Ethereum network, leveraging zero knowledge proofs to bundle up transactions and send them, improving scalability on the blockchain. ZK, or zero knowledge is required of the transactions. This hence reduces computing and storage resources for validating the block by reducing the amount of data held in a transaction.

Speaking on the integration, CTO of Tether, Paolo Ardoino, named ZK-Rollups as the most comprehensive and most preferred second layer solution on Ethereum as it works on-chain.

Tether is working on reducing the amount of transactions conducted on the Ethereum blockchain in a bid to decongest and probably reduce the fees. Recently, the stablecoin was added on OMG Network, also a layer 2 solution, as a sidechain to help in scaling Ethereum and reduce the skyrocketing transaction fees.

The growth of Tether’s demand has been majestic over 2020 as Tron and Ethereum both hold more USDt than the Bitcoin network. The token set an all-time high market capitalization as reported by BEG after a frenzy across the DeFi space caused a spike in demand.

The demand of USDt – as the largest stablecoin – has seen it flip the number of transfers and transactions made on the largest blockchain, Bitcoin. According to a Coinmetrics report, the 7-day average adjusted transfer value of Tether broke the $3 billion mark, finally reaching $3.55 billion compared to Bitcoin’s $2.94 billion as of Aug 25.

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Author: Lujan Odera

Ethereum Fees Crashes 80% Much Like Transaction Count as ETH Price Retreats

The most popular USD pegged stablecoin Tether that is the second biggest gas guzzler on the Ethereum network recently adopted OMG Network for the settlement.

This integration between Tether and Layer 2 solution for Ethereum – OMG Network is expected to result in a reduction of fees and confirmation times, which has become extremely important in recent times because of the skyrocketing fees and congestion on the second largest network.

In the first half of August, USDT transfers accounted for 14% of all fees spent on Ethereum. Out of the total $12.9 billion supply of USDT, $8.6 billion (66.6% of all supply) is issued on Ethereum. Just this week, 1 billion TRC20 USDT coins were also swapped into ERC20.

The primary reason meanwhile for the jump in the cost to transact on Ethereum is DeFi applications such as Uniswap, as per ETHGasStation.

ETH25 Leaderboard

This week, the average transaction fees on Ethereum jumped to its all-time high at $6.6 but since then it has dropped 80% to around mid-July levels which as Santiment puts it is a “nice opportunity for significantly cheaper on-chain operations.”

ETH Trans Fees

The immense growth in stablecoins and DeFi usage has been having an adverse result on Ethereum.

As we reported, the debacle of the DeFi experiment YAM. Finance was the real culprit for pushing the Ether fees so high, that wasn’t seen since the launch of the platform in 2015.

The average gas price that has also jumped over 260 Gwei has also come down to about 110 Gwie level, as per Blockchair.

However, the gas usage continues to hit a new all-time high which means the usage of the network hasn’t slowed down, close to hitting 80 billion per day.

This could be because of the transaction count on the network, which dropped to 612k today, down from over 1.2 million on August 10, inches away from the all-time of 1.34 million on January 4, 2018, during the peak of the last bull run.

blockchair eth

Much like these metrics, the price of Ether also took a fall. ETH dropped over 13.5% to $380 in line with Bitcoin falling under $11,400 which has been because of the strengthening US dollar index. At the time of writing, Ether has been trading at $392, still in the red but up 198% YTD.

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Author: AnTy

Crypto Mom, Hester Peirce, Secures Second Term as SEC Commissioner Through 2025

The US Securities and Exchange (SEC) Commissioner Hester Peirce, aka “Crypto Mom,” has been confirmed for a second term that will last till June 5, 2025, by the US Senate in a voice vote.

The “Crypto Mom” nickname was bestowed upon her by the crypto community for her support of the cryptocurrency market. Just last month, during her testimony in the nomination hearing, she maintained that stance as she said crypto is “clearly going to be here to stay, and I would like us to set up a regulatory framework that works well for crypto.”

Pierce wants to work on SEC’s “attitude towards innovation,” which she said is highlighted in their consideration of crypto.

Earlier this year, she proposed a three-year safe harbor for blockchain companies that conduct token sales. Here, she talked about SEC oversight and adherence to disclosure standards while allowing the firms to develop a network and work toward decentralization before being subject to the Howey test.

She is also an advocate for the approval of a bitcoin ETF, which has been rejected numerous times on the round of price manipulation. In February, in a dissenting statement, Pierce objected to SEC’s approach to these products and that “it evinces a stubborn stodginess in the face of innovation.”

As we reported, with the potential of SEC Chairman Jay Clayton moving to the US Attorney’s office, Pierce is also speculated to be the next SEC Chair.

“On behalf of our 4,500 dedicated colleagues, we applaud their long-standing commitment to investors and look forward to their continued work to advance the SEC’s vital mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation,” Clayton and fellow commissioners congratulated Pierce and Caroline A. Crenshaw.

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Author: AnTy

USD-Pegged Cryptos & BTC Continue to Rise in Contradiction to the Falling US Dollar

The US dollar is not having a good start in the second half of 2020.

The dollar index, which measures the greenback against a basket of leading currencies, has fallen 9.5% since the March high. July was the currency’s weakest monthly performance in a decade after USD fell to a two-year low.

Source: TradingView

This weakness has been tied to the market, expecting further easing of US monetary policy, a lack of agreement among lawmakers on further fiscal stimulus, and falling bond yields.

Dollar’s loss, however, has been turning out to be good for other asset classes. Gold has hit a new all-time high at above $2,000. Bitcoin is also up 58% YTD at around $11,400, and this could be the time to stack more sats. Trader Scott Melker said,

“This is arguably the most pivotal moment we have seen for the United States Dollar since it bottomed in 2008. This channel has been intact for over 10 years. If it breaks down, hide yo’ kids and buy a metric ton of Bitcoin.”

Bitcoin’s gains have also been attributed to the dollar’s fall, and the digital asset is further expected to benefit from USD weakness.

“If the dollar continues to depreciate, there is a high probability that Bitcoin will continue to rise,” said Jay Hao, CEO of OKEx.

Crypto also addresses frictions such as settlement and transparency, which were “assumed” to be “very hard to solve before,” said Ripple CEO Brad Garlinghouse. “Crypto is up 80% while USD is down 3% YTD.”

Fueling the Rise of Stablecoins

Another interesting facet seen in the crypto market while USD continues to lose its value is the increase in the demand of USD-pegged cryptos.

Stablecoins have had a rapid rise following the crypto crash in March, which was spurred by a massive sell-off in the global equity markets, which led to a huge rush into cash and a global shortage of dollars. Coin Metrics in its joint report with Bitstamp says,

“Moving into stablecoins allows investors to effectively keep money parked on the sideline without having to completely cash out into fiat currency and incurring fees. This rush to safety likely accounted for a significant portion of the increased stablecoin demand following March 12th.”

Stablecoins are back on the rise, with Tether in the lead, which added more than 400 million to its supply in just three days, to a total of over 11.5 billion.

USDT Supply
Source: CoinMetrics

Another driver behind this growth is the use of stablecoins as a medium of exchange, given their ease of international transfer. An increase in these types of payments could be due to hyperinflation in many fiat currencies following the March crash.

The transfer value of these fiat-pegged cryptos reached over $5 billion on July 27th, led by USDT-ETH, USDC, and DAI.

Stablecoin Transfer Value
Source: CoinMetrics

According to Coin Metrics, this continued rise in stablecoins is likely to help introduce more new users into the crypto ecosystem.

“Stablecoins could be the gateway that helps spur crypto’s global adoption, and boost usage of BTC and other crypto assets along the way.”

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Author: AnTy

Second US Stimulus Package of $1,200 on the Way as Bitcoin Bulls Gain Momentum

A second stimulus check is on the way for American citizens, according to the White House’s economic advisor, Larry Kudlow. He confirmed this position during an interview with CNN’s Jake Tapper on July 26, signaling that the Fed’s printers might soon be busy again. This news coincides with strong crypto market bulls that have since pushed Bitcoin past $10,360 as of press time.

Earlier, BEG reported that the first stimulus round might have helped Bitcoin recover from black Thursday, given that quite a large number of Americans invested in Bitcoin. Could this new stimulus round push BTC further? A lot is clearly in play, but an injection by the Fed will likely result in a BTC rally, just like other markets have started to recover.

The European Union also recently announced plans to initiate a second Euro stimulus, aiming to distribute close to 1 billion Euros. While a direct correlation has yet to be linked to Bitcoin’s price surge following the announcement last week, speculators see the move by the EU may have contributed to Bitcoin’s price movement. The leading crypto asset had been stable for quite a while, ranging between $9k and $9.3k, but this resistance has since been broken over the past week.

Bitcoin Investors Gained over 40% ROI Since April.

With most of the stimulus payment processes clearing in April, investors who got into the market at the time are now over 45% in profit.

As the March economic downturn took a heavy toll on all sectors, the price of BTC dipped to lows below $4,000, but then eventually climbed back to almost $7,000 at the beginning of April. Looking at these stats, Americans who opted to buy Bitcoin with their stimulus money can cash out with around 40% gains depending on at which point they bought into the market.

Though considered volatile, digital assets such as Bitcoin are proving to be lucrative as fundamentals make inroads to the retail space. No wonder applications like Jack Dorsey’s Cash App are fast catching up with this trend.

The platform recently moved to allows Bitcoin purchases, including an automatic feature for such executions to grow revenue through Bitcoin’s demand. It is quite noteworthy that most of Cash App’s Q1 revenue this year came from Bitcoin purchases, a trend that might replicate itself in an even bigger way should more Americans decide to spend their stimulus on Bitcoin.

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Author: Edwin Munyui

U.S Treasury Secretary Says the Country Will Not Shut Down Despite Second Wave COVID-19 Fears

U.S Treasury Secretary, Steve Mnuchin, has ruled out the possibility of a second lockdown despite a spike in new COVID-19 cases within the United States. This comes as Wall Street and Asian markets dipped towards the end of last week in fears of possible second wave.

Mnuchin was speaking to CNBC reporter, Jim Cramer, on June 11 as he made these remarks. He went on to defend the position of keeping the economy open noting that a contrary move would cause more damage,

“We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage.”

Furthermore, many vital areas such as medical have been put on hold and ought to bounce back according to Mnuchin. The Treasury Secretary noted that they foresee a bounce back in the remaining two quarters of 2020.

The Optimistic Outlook

While the U.S remains as the highest country with active COVID-19 cases, Mnuchin signaled an optimistic future for the leading economy. He emphasized that President’s Trump approach was prudent coupled with the $3 trillion stimulus approval from the House of Reps and Senate. Notably, only about $ 1.6 trillion of the injected funds are the in U.S economy. Mnuchin has since highlighted that another $1 trillion will be pumped into the economy within the next month.

Following this progress, the U.S Treasury Secretary, said that his number one job is getting everybody to work; an initiative that is already underway in collaboration with the Trump administration. Mnuchin said,

“We have the Fed program, we have Main Street [lending program], which is going to be now up and running, and we’re prepared to go back to Congress for more money to support the American worker.”

Recently, another $3 trillion stimulus package was passed by the House Democrats sparking debate but is yet to be voted in the Republican-dominated Senate. The latter, however, prefer a more conservative approach towards increasing federal deficit to ease the COVID-19 economic effects.

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Author: Edwin Munyui

Numerai Raises $3M in Second NMR Token Sale, Led by Union Square Ventures, Placeholder

Numerai, a hedge fund and information marketplace, has closed its second native token NMR fundraising round at $3 million.

The fundraising round saw participation from CoinFund, Union Square, Placeholder, Ventures, and Dragonfly Capital.

The first token sale was conducted in March last year, raising $11 million with its fundraising round being led by Paradigm and Placeholder. A majority of the funds raised in the first round were utilized to build the hedge fund.

Numerai is also known for hosting tournaments for data scientists who help the firm find the best trading strategies for the hedge fund. The firm stated that a portion of the raised funds would be utilized to develop their other venture Erasure which is a popular defi information staking protocol and 17th largest Dapp.

Currently, $2.1 million worth of tokens are locked in the information staking protocol which is primarily used for its data scientist tournaments along with its marketplaces Erasure Quant and Erasure Bay.

Erasure Bay is Numerai’s latest initiative, which launched back in March this year to make the interaction between the user and the platform simpler. This new marketplace makes it easier to exchange information before people could only submit predictions related to the equity market, but with Erasure Bay now they can do so.

Richard Craib, the founder of Numerai who was also one of the investors in the fundraising round commented on the success of the token sale and said:

“[This fundraising] gives us a lot more money that goes directly to developing Erasure and increasing the number of stakes, increase the users, and letting the protocol be used all over the Internet,”

Talking about the Erasure Bay, he said:

“Erasure Bay is demonstrating that you can trust other people online if they’re willing to put some cryptocurrency at stake and let you burn it if they misbehave. We did not expect all these weird use cases but we’re into it.”

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Author: James W