The Fed Fires Shots At Libra: FedNow Will Provide Instant Payments Without Bypassing Regulations

In a speech given on Thursday, Lael Brainard, the Federal Reserve governor canvassed on various financial issues in the United States and the world and the issue of stablecoin like Libra was raised.

The Facebook led project that was launched last year with lots of publicity, has been said to fuel the clamor by central banks in the world to develop their own digital currencies. Libra has also elicited criticism across the world with some financial regulators vowing to never allow the stablecoin to operate within their borders.

Jerome Powell,the Fed’s chair, explained to Congress that Libra ‘really lit a fire’ in regards to the works of the US central bank.

On her part, the Fed governor has previously stated that they are working with several central banks across the globe to come up with a way of introducing central banks issued digital currencies (CBDC).

Brainard’s speech majorly talked on FedNow which is a platform that is being created by the Fed which will allow financial institutions in the country to make instant payments. Brainard stated that most of the core aspects of the platform have been approved by the Federal Reserve Board.

Brainard’s speech also touched on the future of payment systems in the wake of advanced technology. She stated that stablecoin network projects such as Libra have raised fundamental issues on regulatory standards, financial stability as well as the aim of private money in the world. She stated:

“Efforts by global stablecoin networks such as Facebook’s Libra project to drive the next stage of payment innovation have raised other fundamental questions about legal and regulatory safeguards, financial stability, and the appropriate role of private money.”

The speech seems to explain some of the key projects being undertaken by the Federal Reserve when it comes to payments. Brainard stated that the Fed remains optimistic that technology as well as innovation will be used to deliver payments instantly, safely as well as efficiently. She however cautioned that the right safeguards must be developed for the technology to work swiftly.

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Author: Joseph Kibe

Bitcoin-based Startup Zap Opens Strike for Public Beta And Plans to Release Visa Rewards Card

Jack Mallers, Zap founder, revealed on Thursday that Zap’s Strike product, which enables individuals to receive Bitcoin in US dollar form through direct bank deposits, opens up for the public beta.

Mallers, who is also a lightning network developer, announced that Zap has finally entered Visa’s Fast Track program. In an email with CoinDesk discussing the firm’s 2020 plans, Maller elaborated that joining the program will position the firm to enter the market quickly. He said:

“Visa works with members of the Fast Track program to help them go to market in the most efficient way possible, providing them support and resources every step of the way.”

Mallers also explained that his main focus for 2020 is introducing a Strike card for use by consumers using the app as well as integrating it with Visa Direct, the program which makes Venmo payments so fast. However, he did not give a date when the Strike card will be launched.

Mallers also explained that Visa will be Zap’s partner for consumer issuance offering but will not take part in merchant offering.

Visa has been very aggressive in inking deals with crypto-based firms this year. For instance, with Coinbase, as well as Fold, the shopping reward app, provides corresponding Visa cards. The cards are mostly used by cryptocurrency users who prefer to get crypto rewards as opposed to other forms of kickbacks. Also, there are crypto debit cards that enable individuals to use dollars. Currently, it is not clear the options that Zap will avail to its cardholders this year.

Although Visa confirmed the partnership deal, it declined to offer additional information by the time of publication.

While Cash App by Jack Dorsey, as well as a renowned exchange platform, Coinbase are highly referred to as the mainstream apps when it comes to selling and purchasing Bitcoin, Mallers is set to provide an app with the same capabilities but at low costs.

Currently, the Strike platform is mostly common among small businesses as well as with their customers.

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Author: Joseph Kibe

Genesis Capital to Become the ‘Goldman Sachs’ of Crypto with Vo1t Acquisition

New York-based cryptocurrency firm Genesis Capital announced on Thursday that it has acquired Vo1t for an undisclosed amount.

With this deal, Genesis is moving to become a prime brokerage and join the likes of Fidelity Digital Assets, BitGo, and Tagomi.

The aim is “to build the preeminent prime brokerage in the digital currency ecosystem — a one-stop-shop for trading, lending, and securing digital assets for financial institutions,” said Michael Moro, Chief Executive Officer of Genesis in its official announcement.

It would be like the ‘Goldman Sachs’ in the traditional financial world, offering a full suite of services to its clients.

Race to Zero Fees

With the digital currency marketplace maturing at a rapid pace witnessing the entry of small and large financial institutions, there is a raising need for a prime broker.

Offering crypto custody to its clients will also help the company attract a wide array of institutional clients, especially those that are required to hold assets with certified custodians. Moro said,

“My view on the custody space is that it’s not a great standalone business. There’s a lot of competition, and it’s race to zero on fees.”

Its latest acquisition Vo1t is a London-based custodian with only six employees that just recently partnered with IBM’s Hyperledger and Genesis is “absolutely thrilled to have them on board.”

Grayscale to make the shift from Coinbase to Genesis?

Interestingly, Genesis that goes back to 2013 is the subsidiary of crypto conglomerate Digital Currency Group just like Grayscale.

Grayscale currently uses Coinbase for its crypto custody needs which the US-based crypto exchange fulfilled by striking a $55 million deal with Xapo last year.

Now, it’s possible that Grayscale — that holds 1.7% of all the bitcoin in the world, will move its crypto custody business from Coinbase to its sister company Genesis.

There has been no comment from Moro on this, he just told Fortune they are governed by long-term contracts.

Besides becoming prime brokers, Genesis has already started growing its international team with new offices in London and Singapore. Soon, they will be launching a derivatives trading desk and adding capital introduction capabilities for hedge funds, quant funds, asset managers, and family offices.

[Also Read: Crypto Lender, Genesis, New Loans Issuance Hits $2B In Q1 For Its Largest Quarter Ever]

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Author: AnTy

Bitcoin Investors Continue to Withdraw from Exchanges While Ethereum Balances Surge

As we have been seeing since Black Thursday, Bitcoin investors are choosing to HODL and store their bitcoin with themselves and remove their digital assets from cryptocurrency exchanges.

These bitcoin withdrawals from exchanges started with crypto derivatives platform BitMEX which suffered two DDoS attacks on the day of violent sell-off in March. Its web traffic in April also declined 40% to just under 8 million.

BitMEX’s BTC supply is now down 31.5% at 216.0K BTC, down from a peak of 315.7K on March 13th.

Bitfinex takes a hit

Initially, BitMEX recorded the highest decline but Bitfinex has taken even a bigger hit of 51.6%, as per the data provided by Coin Metrics.

From the high of 193.9k BTC on March 13th, Bitfinex now holds only 93.8k BTC.

Interestingly, just last week, a bitcoin whale on Bitfinex known as Joe007 vanished. On May 7, he deleted his account, leaving a farewell letter in which he described his time on Twitter as an “experiment” and also removed himself from Bitfienx Leaderboard.

Joe007 was the most profitable bitcoin trader in the past six months with $10 million gains recorded every month while Bitfienx realized a $25 million loss.

But Joe007’s gains led to a loss of $18.3 million after he shorted bitcoin at $6,800.

Currently, bitcoin is trading at $9,700, making its way to $10,000 once again after unable to maintain this level last week.

Halving didn’t have any effect on this trend

Binance was the only one that saw an increase in its BTC holdings as it captured BitMEX’s market share. Kraken’s didn’t see much change while Gemini’s BTC balance is recovering.

Source: Coin Metrics

Interestingly, in the hours before or after bitcoin halving as well, this trend continued with the exchange net flow decreasing significantly.

“So far, the event has had no impact on 2020’s trend of investors withdrawing BTC from exchanges,” noted Glassnode.

Source: Glassnode

In the exact opposite of the trend Bitcoin (BTC) balance on crypto exchanges is seeing, the amount of Ether (ETH) held on Bitfinex continues to climb to new highs.

Source: Coin Metrics

As of May 10th, Bitfinex held over 5 million ETH.

While Krakeni’s ETH balance saw a small drop to 2 million, Bitstamp’s just under 1 million, Huobi’s resulted in the biggest decline from 5 million ETH to 4 million.

As Ether (ETH) price jumps above $200, its daily active addresses have taken a dip. This metric dropped off the past two times as well when Ether was trading in the $200-$215 range. However, the 6-month trend still looks “fantastic.”

A drop in daily active address and an increase in ETH transferred on the exchanges doesn’t speak well for the price of the second-largest cryptocurrency by market cap.

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Author: AnTy

People Will “Flock en Masse” to Bitcoin as Coronavirus Affects Gold Supply: Max Keiser

Thursday packed a punch after jobless claims soared to 6.6 million after previous week’s over 3 million Americans filed for unemployment. A total of nearly 10 million jobs have vanished in just two weeks as the coronavirus pandemic shuttering business forces vast layoffs.

The speed and scale of such losses are unprecedented, “What usually takes months or quarters to happen in a recession is happening in a matter of weeks,” said Michelle Meyer, chief U.S. economist for Bank of America Merrill Lynch.

US stocks edged higher on soaring jobless claims along with oil prices with Brent Crude up 6% after President Trump said he believes Russia and Saudi Arabia can de-escalate their oil price war.

Gold also jumped after opening lower on a firm dollar on Thursday. Spot gold was up 0.9% to $1,605.60 per ounce. Saxo Bank analyst, Ole Hansen said,

“Both bulls and bears can build a narrative in gold right now, with low inflation, weak physical demand from key buyers and the dollar’s strength for the bears and the economic shock, negative real yields and cenbank easing for bulls.”

Gold-god’s money or Bitcoin-people’s money?

According to ‘Rich Dad Poor Dad’ author Robert Kiyosaki, gold and bitcoin is the option to go for when the Fed is printing money.

However, Bitcoin proponent Max Keiser believes, people will “flock en masse” to bitcoin because there would be no gold for sale due to coronavirus. He said,

“I predict — and this is not only the ultimate use case but the ultimate irony — that once people realize that they cannot get gold, they’ll start flocking en masse into Bitcoin.”

As we reported, due to an increase in demand gold has been facing “unprecedented turmoil” as coronavirus shuts down supply sources.

In Q1 of 2020, while bitcoin was down 11.49%, gold ended the first three months with a positive 4% returns. Bitcoin is currently up 10% jumping to $6,850.

Source: Skew

The world’s leading cryptocurrency has also halvening coming in just over a month which Bitcoin proponents have taken to call “‘quantitative-hardening’ program,” unlike central banks’ unpredictable inflation and money creation. Adam Back, founder and CEO of Blockstream explained,

“Bitcoin quantitative hardening is the sound of bitcoin getting even harder. All while the world loses its fiat mind and plummets into quantitative easing infinity.”

Bitcoin used as an intermediary currency

In other news, unlike gold, Bitcoin is “primarily being used as a vehicle currency across Latin America,” stated Matt Ahlborg, a data scientist at dlab.vc.

As per his research, bitcoin is used as an intermediary currency between fiat currencies to transfer value in and out of Venezuela. The country with hyperinflation doesn’t allow for its currency to be freely exchanged with other currencies, as such,

“remitters and anyone else wishing to transfer value into or out of Venezuela are best served by using the vast network of informal money transmitters available to them.”

In 2019, LocalBitcoins facilitated the trade of $315 million dollar worth of bolivars but it was “a very small fraction of the total of Venezuela-related money transfers that ride Bitcoin rails.”

Bitcoin could actually be facilitating billions of dollars worth of censorship-resistant value transfer to and from Venezuela over the last few years and playing a part in “changing the destiny of an entire country,” said Ahlborg.

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Author: AnTy

BitMEX Provides Clarity On The Insurance Fund After Traders liquidated Last Week

As the cryptocurrency market faced one of its worst days on Mar. 12 dubbed “Black Thursday” following Bitcoin‘s crash to $3,600 USD, BitMEX was put in the spotlight following a crash on its system. In a blogpost published on the website, the largest BTC Futures exchange explained what transpired on Mar. 12 and Mar. 13, to give traders a much needed clarity.

One of the key points that traders were curious about, is BitMEX’s insurance fund, which grew in value as the rest of the market collapsed.

BitMEX opens up on its BTC insurance fund

The statement starts by explaining the liquidation and bankruptcy levels and what processes take place during liquidation. The most important part of the blog is the explanation on what its insurance fund did once the world of crypto came crashing down.

At the time, the exchange was called out for “shutting down the exchange” for about an hour – BitMEX said it suffered double DDoS attacks – forcing out a number of traders in the process when the exchange came back online. Questions fielded in from most of the traders who wondered why the insurance was never activated during the crash.

The exchange wrote that the insurance fund is strictly levered to preventing auto deleveraging (ADL), which is explained as:

“ADL means the automatic deleveraging of the positions of profitable traders (ranked by profit and leverage in that contract) against liquidated positions to prevent bankruptcy.”

The post further states that the insurance fund is not be used to cover BitMEX running costs or contribute to BitMEX profits, and ‘it is not used to influence markets, intentionally or otherwise.”

Community rejects BitMEX explanation

While the explanation given by the exchange soothed a few hearts, a number of traders were left unconvinced. During the whole crash, the insurance fund hit an all-time high as other exchanges faces depletion on their funds. This prompted a number of questions from the community. One trader on Twitter wrote,

“Given that order book was well below mark price, liquidated long positions were well in the red, so it is strange that the insurance fund didn’t lose more.”

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Author: Lujan Odera

$8 Million Ether Sold for Free Through Maker

Black Thursday had been one of the worst days for the crypto community that recorded the violent sell-off across the market. But not only did the prices crash severely, for Ethereum it also resulted in Network congestion, a rise in fees, increased gas price, and liquidation issues with decentralized finance (DeFi) products.

As per cryptanalysis firm Glassnode’s latest insight report, this resulted in triggering unintended consequences for the MakerDAO ecosystem, so much so that it allowed some liquidators to buy a huge amount of DAI for $0.

Chaos Everywhere

On March 12, the price of Ether dropped 43% resulting in the on-chain volumes to spike dramatically as users scrambled to react to the falling prices in the broad market. Not just exchanges, but Ethereum dapps also recorded their highest ever daily activity, both of which overwhelmed the network, which wasn’t the first time.

The network congestion saw the mean gas price for the day surging 6x. Meanwhile, the increase in on-chain activity was,

“especially significant for DeFi apps, which were overwhelmed by the radical spike in demand.”

With gas prices so high, from 80 to 200 Gwei and transactions to be confirmed piling up, the pricing oracles of MakerDAO and Chainlink were unable to update their prices quickly enough to keep up with the rapidly decreasing price of Ether.

Maker’s Medianizer oracle showed a difference of $30, on the higher side, in price. Now, this gave some network participants time to pay off their Maker CDPs which otherwise would have been liquidated. These participants paid high gas fees and rescued their CDPs. And when the price was finally updated, many CDPs got liquidated suddenly en masse.

Amidst this chaos, those that had safeguards in place still got liquidated because safeguards relied on accurate and regular updates price data while some were liquidated notwithstanding if the collateral was purchased yet.

Exploiting the Situation

When Maker CDPs are liquidated, their collateral is auctioned off by the Maker to pay back the CDP owner’s debt with a 13% liquidation penalty. However, on that day, because gas prices were so high and the queue of transactions so long, bids that offered “regular” gas prices weren’t processed fast enough.

A liquidator, likely a bot, took advantage of the situation and won these auctions with a bid of zero DAI, which is buying bundles of 50 ETH for free, only for others to join and take advantage of the situation as well.

As per Glassnode, over $8 million in ETH was liquidated for zero DAI. This resulted in net loss for MakerDAO system, with at least $4.5 million worth of DAI left unbacked by any collateral. But Maker wasn’t the only one undercollateralized.

“Because CDPs are overcollateralized by default, these users should have received the total ETH value of their CDP minus their debt and the 13% liquidation penalty. However, because their ETH collateral was sold for zero DAI, they were left with nothing.”

The largest one has been of 35,000 Ether, equivalent to about $4 million.

After the exploit, MakerDao conducted a vote and decided on increasing the maximum lot size from 50 to 500 ETH and the duration of auctions was also raised.

The Maker Community is now considering printing and auctioning of new MKR tokens for the re-collateralization of DAI that will dilute existing MKR holders. They are also proposing a reduction of Dai Savings Rate (DSR) and the Global Stability Fee to bring DAI’s price close to 1 USD peg.

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Author: AnTy

After Black Thursday, MakerDAO Opens Voting Proposal And Will Hold First-Ever Debt Auction

As Ethereum (ETH) price crashed by 30-40% on “Black Thursday”, the decentralized finance world (DeFi) showed signals of collapse with the largest DeFi protocol, Maker (MKR) contemplating shutting down in response to the value tanking.

However, following talks in the community with MakerDAO –governing council – and a revival of the price of ETH over the early morning on Friday, March 13, 2020, the community will vote on changes of the protocol to further carry out its first-ever debt auction.

Maker (MKR) is a platform that gives out collateral-based loans by producing Dai (DAI). The DAI is minted by users taking up collateral-based positions, mostly in ETH, and the ETH is stored on a smart contract. Once the collateral is locked, the contracts mint out a portion of the collateral value in DAI to give to the borrower.

Maker to carry out the first-ever Debt Auction

If the borrower cannot fulfill their debt obligations, then the collateralized ETH (asset) enters the liquidation phase allowing the smart contract to auction it off to pay the debts. However, as the crypto market exhibits an extremely bearish structure and the heightened pandemic of the COVID-19, the auctions were shortly not very attractive with some investors paying a total of ZERO DAI to gain the ETH.

One Maker community member said,

“Some vaults were liquidated with 0 DAI coming back in the system, resulting in a net loss for the system. The MakerDAO had a +500k$ surplus before the price drop and now has a -4M$ surplus that needs to be filled.”

With the Maker platform facing a $4 million deficit in debt obligations, the contract will self-execute on March 15 to open up the first-ever Maker Debt Auction. This means the contract will print out extra MKR tokens to reimburse the 44 million USD in DAI which will then be publicly available for auction.

The community is, however, remaining positive after the current carnage on Maker, stating the platform has become stronger. One member said,

“It was a trying day for #Ethereum, Maker, investors, and lots of other ppl in #defi — great to see the system prevail and while not perfect, it lives to see another day.

MakerDAO teams already reacting to work with $MKR governance to modify the system state.”

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Author: Lujan Odera

KuCoin Joins Binance, Huobi In Offering A White-Label Crypto Exchange Solution

The global digital asset trading platform KuCoin has made on Thursday the announcement that it’s launching a white-label solution that will allow its customers to make in only 72 hours fully functional crypto exchanges.

The platform will be called KuCloud and have 2 products to offer: XCoin and XMEX. Both these products will include KuCoin Spot and KuMEX Futures’ functionalities. Here’s what KuCoin’s co-founder Johnny Lyu said about KuCloud:

“The idea of KuCloud started in 2018 as a concept called ‘subnets’, with which we intended to give our exchange a powerful advantage when expanding into new markets since each new exchange can act as a separate entity.”

The Platform Will Be Customizable

Details about what the platform will offer were also presented in the announcement. Therefore, KuCloud will provide services of staking, spot trading, fiat gateway to as much as 150x leverage KuCloud futures trading, and margin trading. Besides, the platform will be customizable according to every client’s needs. Lyu added that:

“Now we go one step further and upgrade the ‘subnets’ to KuCloud, eliminating the difficulties and hassle of opening a crypto exchange, allowing all our partners to build crypto-related platforms with us to contribute to the liquidity and mass adoption of crypto.”

White-Label Solutions are the Future

KuCoin comes to present KuCloud soon after Binance announced the launch of a similar product. Binance Cloud will also introduce coins through an initial exchange offering (IEO) platform and use the over-the-counter trading service. More than this, it will also enable token issuers, fund managers and brokers to develop new streams of revenue and access the native liquidity of Binance.

In 2019, Huobi presented a product that’s quite the same and targets customers in North Africa and the Middle East (MENA region). In order to compete with Binance and Huobi, KuCoin comes with zero fees for launching crypto exchanges, but only for its initial clients.

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Author: Oana Ularu

Dish Network Patents ‘Anti-Piracy Management System’ Using Blockchain Technology

Dish Network has just published on Thursday a patent for its new blockchain-based anti-piracy system that enables owners to see how their content is getting used.

Dish claims the system can oversee and implement ownership rights more efficiently by putting platforms on alert mode when their content is being used without approval. It seems the biggest problem of online streaming is piracy and the distribution platforms are too many to be monitored in an effective manner. While it’s easy to take down unauthorized content after identification, this usually happens after millions of views.

The System Was Initially Filed in 2018

Initially filed in July 2018, Dish Network’s new anti-piracy system uses blockchain technology for embedding ownership data that can only be updated and uploaded by owners. It intends to provide distribution platforms a reference point that’s incorruptible and to make sure the data is authorized. More than this, it helps with the enforcing of ownership rights, taking action against administrators who put up content without permission.

Not Yet Known If the System Will Use Its Own Blockchain

There’s not yet known if the Dish Network’s anti-piracy system will work on an already existing platform or use its own blockchain. Users will be able to pay owners in crypto or fiat currencies for their identity tokens, which will give them the green light to use content. These identity tokens are customizable and permit access for a specified amount time. They also give the authorization for content on some platforms to be edited. When someone unauthorized uses the content, the owner gets notified.

Dish is One of the Biggest Television Providers in the US

Having over 9.5 million patrons in the US, Dish is among the most important satellite television providers in the country. It has grappled to keep its subscribers just as much as other companies in its category did, as more and more people prefer online streaming nowadays.

Back in 2018, when over 1 million subscribers cancelled with them, they said online operators are using their content illegally and filed 2 lawsuits against 2 different platforms. Other important companies that have recognized how efficient blockchain technology is when it comes to copyright enforcement are Baidu and the Korean giant CJ.

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Author: Oana Ularu