Facebook’s Digital Wallet Novi ‘Ready To Come To Market’ Having Secured Approvals In The US

Facebook, whose Payments system is already being used in more than 160 countries in 55 currencies, is beating Twitter, which plans to integrate BTC Lightning Wallet in every account. Meanwhile, Ethereum co-founder is skeptical of both the social media giant’s plans in the crypto space.

“Novi is ready to come to market,” wrote social media giant Facebook’s David Marcus in a blog post. Novi is a digital wallet that is tied to the Diem blockchain-based payment system.

Facebook’s stablecoin project Diem, previously named Libra, was first introduced in June 2019 with the original plan to be backed by a wide mix of fiat currencies and government debt. Now, it’s meant to launch as a stablecoin backed by only the US dollar.

But it ran into resistance from global regulators leading to its rebranding as Diem. In his blog post, Marcus reported the increased obstacles the project has been facing, which is yet to be launched.

Marcus, the former PayPal chief hired by Facebook in 2018 to lead its blockchain efforts, said on Wednesday that the global payments system is flawed, being too slow and too costly, among other things, and they can fix it. And Novi can play an instrumental part in that, he said.

“Change is long overdue. It’ll happen one way or another,” said Marcus, the co-founder of Diem Association, a non-profit consortium overseeing the development of Diem stablecoin.

“We feel that it’s unreasonable to delay delivering the benefits of cheaper, interoperable, more accessible digital payments.”

Marcus noted that they are seeking necessary regulatory clearances and have already secured licenses and approvals for Novi in nearly every state in the US. “We will not launch anywhere we have not yet received such clearances,” he added.

He further said the Diem Association is currently engaged in dialogue with US and global regulators and has addressed every legitimate concern raised so that it can build high-quality and compliant stablecoin with extensive consumer protections.

The Time is Now

Novi, previously called Calibra, is designed to allow users to add money to their wallets that would be converted to a Diem digital currency which then could be sent to others worldwide. But for now, Novi would only start with offering fiat currency within the digital wallet but still, “it would bring people a lot of value,” Marcus said.

Marcus further noted that Facebook is already ‘an actor’ in the payments industry. It has enabled over $100 billion in payments volume in the last four quarters while being used in more than 160 countries for payments in 55 currencies.

“I strongly believe if there was ever a chance to create an open, interoperable protocol for money on the internet and truly change the game for people and businesses around the world, it is now.”

Much like Facebook, Twitter co-founder and CEO Jack Dorsey is working on bringing payments to his social media platform. Last week, Dorsey said he is using “Lightning to enable a currency for the internet” by allowing every account on Twitter to link to a Bitcoin Lightning Wallet.

“FB beat twitter to the punch again. And jack owns a crypto currency focused payments company,” tweeted @IamNomad, a cryptocurrency market maker.

However, Ethereum co-founder Vitalik Buterin is skeptical of both Dorsey and Facebook CEO Mark Zuckerburg’s big plans in the cryptocurrency space.

Commenting on Dorsey’s plans to create a new business focused on decentralized financial services using Bitcoin (BTC), Buterin said in an interview with Bloomberg; it doesn’t really have the functionality to do that as it was designed largely to be a “currency of the house.”

This is unlike Ethereum, which allows one to directly put ETH or Ethereum-backed assets into these smart contracts where arbitrary conditions govern how those assets get released, “Jack is basically going to have to create his own system that enforces those rules,” he said.

As for Zuckerberg’s plan to turn Facebook into a “metaverse company,” Buterin pointed to a “huge amount of mistrust” about the social media platform; as such, he recommended Zuckerberg to build on the existing blockchain instead.

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Author: AnTy

Binance and FTX Cut Down Leverage to Just 20x from Over 100x

The average leverage used on FTX is about 2x, says CEO Sam Bankman-Fried, while CZ says this move has been in the interest of Consumer Protection.

“Today, we’re removing high leverage from FTX. The greatest allowable will be 20x,” down from 101x, announced Sam Bankman-Fried, the CEO and founder of cryptocurrency derivatives platform FTX over the weekend. Ceteris Paribus commented,

“No-brainer considering FTX users don’t seem to be ultra degens and puts them on better standing with regulators. IMO the argument about high leverage isn’t even if it’s right or wrong, regulators will not allow it in the long-run. may as well front-run it.”

Just last week, FTX had announced that it had raised $900 million, with a valuation of $18 billion, from many big names, including Coinbase ventures and to whom buying financial giants like Goldman Sachs or CME is “not out of the question” either.

The decision to reduce leverage has come as the crypto market experiences a strong bounce off of lows.

Binance, which has exited its investment in FTX, has also joined in. CEO Changpeng Zhao said on Twitter that they have already started limiting new users to a maximum of 20x leverage a week ago. Previously, it offered a maximum of 125 times leverage.

“In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks.”

Meanwhile, several hedge funds have curbed their trading on Binance amidst a growing regulatory crackdown on it, the Financial Times reported.

An Effective Margin System

“After lots of back and forth, we’re going to be the ones to take the first step here: a step in the direction the industry is headed and has been headed for a while,” said Bankman-Fried as he explained in one of his famous Twitter threads.

While some are not happy with this cut-down, especially as the market seems to be getting back in the bull mode, others praised this move, noting that extremely high leverage doesn’t turn out to be positive in the long term. Not to mention, crypto is inherently highly volatile and sees big moves regularly.

“A great move,” said Austerity Sucks, adding, above 20x is “just marketing, and is associated w/shadiness now (“100x group”) there’s no real strategic benefit to such high leverage (except maybe spreads), and can legit hurt retail.”

In the Twitter thread, Bankman-Fried further shared his reasoning behind the same, noting that their product and margin system “tend to attract sophisticated users,” and liquidation on FTX normal orders happens without any extra loss.

He further shared that, much like every other exchange, on FTX as well, liquidations are “a tiny fraction” (less than 1%) of volume and positions. And while “many users have expressed that they like having the option, very few use it,” added Bankman-Fried.

According to him, the average leverage used on FTX is about 2x, and high leverage is not an essential part of the crypto ecosystem.

“An effective margin system is integral to an efficient economic system,” said Bankman-Fried.

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Author: AnTy

Japan’s SBI Holdings Says XRP Ledger Can Be Used To Build NFT Markets

Japan’s SBI Holdings Says XRP Ledger Can Be Used To Build NFT Markets

Japanese financial group, SBI Holdings believes the XRP token and XRP Ledger can be used alongside non-fungible tokens (NFTs).

Tokenization Could Be An Opportunity For XRP Ledger

In a new report titled “Current Management Information Briefing,” SBI listed reasons why it thinks XRP could be great for NFTs. The group argues that XRP has extremely low transaction fees and is an asset that settles transactions instantly. The company stated,

“The blockchain XRP Ledger has the ability to tokenize not only XRP but also a variety of other assets and has extremely low transaction fees that can be settled instantly with a very low environmental impact because it does not use mining and has decentralized trading capabilities.”

Citing a blog post on Ripple’s website dubbed “Building a More Sustainable, Scalable, and Accessible Future for NFTs with XRPL”, SBI said NFTs can be issued on the XRP Ledger.

The firm added that XRP community members have already proposed a model for NFTs showing that Ripple is thinking in that direction. The model will be formally adopted upon review and voting by the XRP community, SBI disclosed.

NFTs are digital assets that are established as unique contracts on a blockchain to indicate the true owner of a digital product.

The company’s Fintech arm subsidiary, SBI Remit announced plans to collaborate with the bank to build a RippleNet-based international remittance platform.

This partnership would SBI Remit which already uses RippleNet to join hands with Hamamatsu Iwata Credit Bank to create a RippleNet-based international remittance platform.

RippleNet is aimed at tackling the high demands of rapid, low-cost payments while changing the landscape of cross-border international payments.

RippleNet has a host of banks and money services businesses on its network that use its solutions to provide a frictionless experience to send money globally.

Ripple’s Focus On Expanding RippleNet

Ripple is continuing its plan on expanding the RippleNet network. SBI Ripple Asia, the joint venture between SBI Holdings and Ripple, is part of Ripple’s efforts in extending RippleNet’s use.

In May, the joint venture introduced Cambodia’s first international remittance service using blockchain rails. The partnership is aimed at delivering the money-transfer service between Cambodia and other countries using RippleNet.

Ripple is also broadening RippleNet in Europe. The firm just hired a Managing Director to head its European operations.

The new managing director Sendi Young would oversee strategy and champion the expansion of the RippleNet technology.

Ripple has previously described the European market as a critical one for the company. The company has experienced high transactions and customer growth in the region. In addition, a quarter of its customers currently are based in Europe.

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Author: Jimmy Aki

Norway Central Bank Governor: Bitcoin is ‘Too Costly’ to be Used and Doesn’t Preserve Stability

Norway Central Bank Governor: Bitcoin is ‘Too Costly’ to be Used and Doesn’t Preserve Stability

The world’s most cashless country doesn’t want its people to use Bitcoin as an alternative.

Norway has been steadily moving towards a cashless society, but the country’s central bank governor says people shouldn’t turn to Bitcoin as an alternative.

Oystein Olsen, the governor of Norges Bank in Oslo, says it’s inconceivable that Bitcoin will replace the fiat currency controlled by central banks, adding that while people like to talk about it, Bitcoin won’t be a threat to central banks.

Bitcoin is “far too resource-intensive, far too costly, and most importantly, it doesn’t preserve stability,” Olsen said in a phone interview.

“I mean, the basic property and task for a central bank and central-bank currency is to provide stability in the value of money and in the system, and that is not done by Bitcoin.”

Recently, Kjell Inge Rokke, one of Norway’s most prominent businessmen, endorsed Bitcoin, saying it will ultimately be on the right side of monetary history. His Aker ASA also invested $58.6 million in Bitcoin and set up a new unit to establish Bitcoin mining operations and to invest throughout the Bitcoin ecosystem.

Trading above $54k, the leading cryptocurrency has become a trillion-dollar asset this year. According to Kjell, BTC price might one day even be “worth millions of dollars.”

The crypto asset hit a new ATH at nearly $62k earlier this month, surging more than 15x from its March low as institutions, hedge funds, high-net-worth individuals, pension funds, and insurance firms increasingly join the crypto market and invest in Bitcoin.

CBDC Won’t Disrupt The Private Sector

Amidst the growing interest and adoption of crypto assets, central banks from China, Sweden, Japan, and the US are developing their own digital versions of fiat currencies.

While Norway has become the world’s most cashless country, with only 4% of all payments conducted with coins and banknotes, as shared by Norges Bank Deputy Governor Ida Wolden Bache last November, the country isn’t leading in central bank digital currencies (CBDC).

Norges Bank, however, is due to publish a report on its CBDC project next month, which the officials affirm “will not change private sector credit intermediation.”

Earlier this month, Wolden Bache said the goal is that users “must be able to pay efficiently and securely in” Norwegian kroner.

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Author: AnTy

Elon Musk’s Tesla Used Coinbase OTC Desk to Broker the $1.5 Billion Bitcoin Purchase

Elon Musk’s Tesla Used Coinbase OTC Desk to Broker the $1.5 Billion Bitcoin Purchase

Over the past year, institutional demand has been a blessing to the crypto industry. With more public firms showing interest in digital assets, the market has swollen in size.

However, what many institutions seem to have in common is their port of entry into the crypto market – Coinbase.

Coinbase Wins Another Institutional Client

Coinbase had been behind Tesla’s purchase of $1.5 billion in Bitcoin, which the auto manufacturer announced last week, The‌ ‌Block‌ ‌‌reports. Citing sources familiar with the exchange, the news source confirmed that Coinbase had begun the purchasing spree through its over-the-counter (OTC) trading desk in early February.

The source added to The Block that Coinbase’s brokerage service now counts over five Fortune 500 companies as clients. With the exchange looking to go public later this year, its clientele definitely gives it additional credibility to seek a solid offering.

Did MicroStrategy Have a Hand?

Coinbase has been doing some significant work when it comes to helping institutions improve their exposure to cryptocurrencies. Last year, Coinbase was reported to have facilitated British asset management firm Ruffer Investments with their $750 million Bitcoin purchase, marking the latter’s focus on alternative investments as it looked to hedge against devaluation.

Jonathan Adkins, a company representative, said Ruffer had made the purchase through One River Digital, an offshoot of top volatility hedge fund One River Asset Management. One River eventually contacted Coinbase, which brokered the investment over several days.

The San Francisco-based exchange has also confirmed that it helped business intelligence firm MicroStrategy with its Bitcoin investment. MicroStrategy began purchasing Bitcoin last July, committing $425 million in less than a month. Pumping its brokerage and custody service, Coinbase confirmed in an October blog post that it had indeed been the facilitator of MicroStrategy’s purchase.

MicroStrategy has been on a tear since, raising $650 million in December to facilitate a Bitcoin purchase and buying $10 million more of the asset last month, and raising $1 billion more to buy. It is unclear whether the company went through Coinbase since then.

The move from Tesla isn’t so surprising. Last year, Michael Saylor, MicroStrategy’s chief executive, had offered to “share his playbook” with Tesla CEO Elon Musk when the latter showed openness to purchasing Bitcoin. While any communication between the two, eventually leading to last week’s purchase, seemed to have happened privately.

Coinbase Wants To Go Public

Coinbase is considered one of the most successful crypto exchanges in the world. With five Fortune 500 companies on its list of clientele, the company is also looking to go public later this year. The famous crypto exchange has $90 billion worth of assets in cryptocurrencies alone.

The crypto exchange seems to attract some of the most famous institutional investors looking to make huge crypto bets.

As part of its enormous stake in the crypto industry, the crypto unicorn had $20 billion worth of cryptocurrency assets in custody for its clients as of November 2020.

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Author: Jimmy Aki

Bitcoin Mining: Network Congestion, Fees Uptick, China Ban, & Russian Hash Power in Play

In the world of Bitcoin mining, the hash rate of the network, the computing power used to validate BTC transactions has taken a drop following the positive difficulty adjustment of 8.8%.

The 7-day average hash rate of the network is currently at 131 EH/s, down from the all-time high of 146.8 EH/s, as per Blockchain.com.

A decline in the hash rate resulted in a sudden jump in the total number of unconfirmed transactions in the mempool to over 91.2k today only to get back down to 43k shortly.

This clogging of the network happened as the Bitcoin price broke new ATH’s yesterday. This led the crypto exchange Coinbase to experience delays in BTC withdrawals.

Before the issue was resolved less than five hours after the incident was first reported, Coinbase stated, “We are currently experiencing delays in processing BTC withdrawals due to Bitcoin network congestion.”

This, as usual, had the fees on the network jumping to $5.3, up from around $2 on Nov. 22nd. Miners are enjoying this spike in fees and price with their 7-day average revenue pushing above $18 million.

China is at it again

Amidst this came the report from China that crypto miners located in Baoshan, Yunnan have received a notice of the ban on November 30. As per the document, the power station is asked to stop supplying power to the miners.

After Sichuan and Xinjiang, Yunnan is the third-largest mining place in China.

According to Chinese publications, the attitude of Chinese local power companies continues to change towards crypto mining. It is reportedly more of a demand for economic interests than because of political pressure.

“China rolling out all the old tricks. Bull market confirmed,” commented Alistair Milne on this.

Siberia Dominates Russia’s Hash Power

According to a report by HASHR8 Inc., Russian bitcoin miners rank among the top three countries for contributing hash rate to the largest network.

It further reveals that Russia’s Siberian region accounts for the dominant portion of the country’s mining facilities. It is the “significant energy surplus from advanced hydropower infrastructure in the region” that enables the miners to “secure extremely competitive electricity rates.” The report stated,

“The estimates indicated that Russia’s share of hashrate was comparable to that within the United States. Recent estimates by industry professionals in Russian mining put Russia’s energy draw from mining at ~800 to 900 MW.”

The report mentions that the federal law passed in the country this year “clearly defines Bitcoin mining as an economic activity.”

It further noted that pooling activities must be carried out with a “foreign entity.” While the mining hardware imported is subject to a 20% tax, those imported indirectly through Kazakhstan only involve a 12% VAT charge.

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Author: AnTy

JPMorgan Dives Deep in Blockchain with Onyx, CEO says Tech is Now Just Beyond the ‘Hype Curve’

  • JPMorgan’s stablecoin JPM Coin is finally being used commercially for the first time.

Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, revealed on Tuesday that a major tech firm, whose name is not disclosed, will be using the token to make global payments starting this week.

The investment bank that moves more than $6 trillion a day across more than 100 countries has created a business unit called Onyx. In the making for five years, it is staffed with around 100 employees to do the blockchain projects in-house. Georgakopoulos said,

“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business.”

The bank aims to save 75% of the total cost for the industry. But the project is months from its commercial launch, said Umar Farooq, the newly named CEO of Onyx.

“If you think about blockchain, we are either somewhere in the trough of disillusionment or just beyond that on the hype curve,” Farooq said, referring to the “Gartner Hype Cycle.” “That’s why at JPMorgan, we’ve been relatively quiet about it until we were ready to scale it and commercialize it.”

As we reported, the bank has also revamped its Interbank Information Network (IIN), piloted in 2017 as Liink that has over 400 banks and corporations as partners.

The company is also looking into creating new, separate payment rails for central banks that are interested in starting their own currencies. Georgakopoulos said,

“If we are able to develop a model that works, we think the probability of adoption becomes very high.”

Additionally, JPMorgan is reportedly actively exploring digital asset custody and is looking for help from crypto firms. To offer the services, it would enlist sub-custodians and have already reached out to firms like Fidelity Digital Assets and Paxos.

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Author: AnTy

BTC-e Exchange Operator’s Trail for Bitcoin Fraud Begins in Paris

The four-day trial of Alexander Vinnik, 41, alleged to have used ransomware in a $157 million (135 million euros) bitcoin fraud that involved 200 victims, began in Paris on Monday.

The Russian man who is wanted both in the US and Russia faces up to ten years in prison over charges of extortion, money laundering, and criminal association.

He was one of the creators of malware called “Locky” delivered through email, and if downloaded, it encrypts the recipient’s data, and then the affected party is asked to pay a ransom in BTC to free it, as per french prosecutors.

During the period of 2016 and 2018, several companies, local councils, and legal offices were targeted in France, and twenty of the victims paid the ransom through BTC-e.

A technical consultant at the digital currency exchange, Vinnik said he had no knowledge of the illegal activity and denied any wrongdoing.

The US also wants to prosecute him on the grounds of laundering billions of dollars through BTC-e.

Vinnik was arrested in the summer of 2017 in Greece, while on vacation with his family, at US authorities’ request. After two years of tug-of-war, Greek authorities ruled that he would be extradited first to France, then to the United States, and then finally to Russia, where he faces lesser charges.

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Author: AnTy

Biggest Banks Involved in Moving $2 Trillion Illicit Funds, Reveals FinCEN Documents

And they say bitcoin is used for criminal activities.

The leaked documents of $2 trillion transactions, a tiny proportion of the SARs submitted over the period, revealed that some of the world’s biggest banks have been allowing criminals to move dirty money around the world.

The FinCEN files, having over 2,500 documents, were sent by banks to the US authorities between 2000 and 2017. FinCEN is the US Financial Crimes Enforcement Network that combats financial crime and deals with transactions made in the US dollar even if they took place outside the US.

The agency requires the banks to file Suspicious Activity Reports (SARs) if their clients are involved in some nefarious activities.

Unlike the number of big leaks regarding financial information over the recent years, including the 2017 Paradise Papers, 2016 Panama Papers, 2015 Swiss Leaks, and 2014 LuxLeaks, this time, not just a few companies but several banks are involved in wrongdoing, which isn’t surprising.

As per the leaked documents, the banks involved were HSBC, JP Morgan, Barclays, Deutsche Bank, and Standard Chartered.

HSBC allowed fraudsters to move millions of oilers of stolen money, even after learning from the US investigators that the scheme was a scam. In turn, its shares fell 5% to the level last seen in 1995.

Just like HSBC, Standard Chartered’s shares crashed 5%, to a level last seen in 1995. The bank moved cash for Arab Bank for over a decade after clients’ accounts at a Jordanian bank were used in terrorism funding.

The central bank of the United Arab Emirates’ also failed to act on warnings about a local, from which was helping Iran evade sanctions.

In the light of plunging shares of the banks, Binance CEO Chagpeng “CZ” Zhao said, “Might be a good time for their treasury to buy bitcoin?”

Read Also: Out of $1T In Crypto Transactions, Only 1.1% Were Used In Illicit Activities: Chainalysis

While the most prominent investment bank, JP Morgan, allowed a company to more than $1 billion without knowing who owned it, later to be found that it belonged to a mobster, Barclays was used by Russian President Vladimir Putin’s closest associates to avoid sanctions. The shares of the bank dipped the most, 6.3%, to the April 2020 level.

Deutsche Bank laundered money for organized crime, terrorists, and drug traffickers and saw its shares tumbling 5.4% to May 2020 level.

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Author: AnTy

Russian Parliament Pushes Forward With the Waves-based Blockchain Voting; Despite ID Issues

  • Russia’s blockchain-oriented voting system set to be used in the upcoming national elections is yet to be fully efficient but will be implemented nonetheless.
  • According to the country’s Central Election Commission, this initiative’s user tests have been successful, although some improvements need to be made on voter identification.

First reported by Russian media, Kommersant, the newspaper, highlighted that Yaroslavskaya and Kurskaya parliamentary elections scheduled for September 13 would leverage this blockchain solution for remote voting. So far, around 15,000 people have registered to vote through this blockchain-based ecosystem, while at least 3,500 had participated in the project’s testing.

The Technical Underpinnings

This project was developed under Russia’s state back telco giant, Rostelecom, which will also host the blockchain nodes on its company servers. Built on the enterprise version of Waves blockchain, the e-voting system leverages some advanced solutions, including encrypted tech that is yet to be battle-tested. Dubbed ‘homomorphic encryption,’ this tech keeps the votes encrypted until voting is over when they can finally be decrypted.

While the value proposed is better than what was used in Moscow’s e-voting, homomorphic encryption poses a challenge when it comes to voter identification. MixBytes Co-founder and Cybersec expert, Sergey Prilutsky, told Coindesk that authorities could meddle with the votes if they are in control of the list. In addition to this, the embedded encryption in homomorphic ‘elliptic curves’ is not considered secure by Russia’s counter-intelligence agency, FSB.

“It uses elliptic curves that are not considered secure by the FSB,” said the Chief Product Officer of Waves, Artem Kalikhov.

He, however, went on to assure stakeholders that the firm is working on this and noted progress with other functions such as e-signatures, which have already been certified by the FSB. Also, Kalikhov said that getting the ‘homomorphic encryption’ certification is unlikely to be a challenge that might stall development.

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Author: Edwin Munyui