Is A Fed-Controlled Digital Dollar A ‘Win’ For the Public; Will it Pave Way For Faster Payments?

  • A digital dollar means Fed will be “free to impose negative nominal interest rates on all dollar-holders,” and privacy concerns – Lawrence H. White, a professor of economics
  • Fed-issued digital currency would need to be carefully designed, implemented, and regulated for faster, cheaper and more secure payments – Neha Narula, the director of the Digital Currency Initiative at MIT

Central banks around the world are assessing the benefits of issuing a state-controlled digital currency after China announced that it is close to launching its digital yuan and Facebook launching Libra. Just last week, there have been reports that Riksbank has started testing e-krona.

Even the Federal Reserve chairman Jerome Powell came forward to share that Facebook’s so-called cryptocurrency has been a wakeup call for them to start researching the concept of a digital dollar.

However, there has been much debate about Fed-controlled digital currency where proponents say it would facilitate faster and cheaper payments while protecting the Fed’s ability to conduct monetary policy, opponents say it would be costly and less efficient and could harm the government’s privacy.

Digital Dollar a “No Win” for the Public

The US government issuing a digital currency may not be a no-brainer but “it won’t be a “win” for the public,” said Lawrence H. White, a professor of economics at George Mason University.

According to the Wall Street Journal, White argues that most proponents of central bank digital currency are envisioning a currency that would give the government the

“ability to track all payments and eliminating the anonymity provided by physical cash today.”

And the claims of the national digital currency making retail payments costless, secure, and almost instantaneous are “dubious”. A central bank retail-system he said would require the Fed to match the level of services provided by commercial banks today which means investing in ATMs, branch offices, phone apps, tellers, and much more. Also, the payments system needs to be continually improved through innovation. White said,

“Given the government’s poor record on efficiency, the likely outcome would be a system that falls short on customer service or loses money at taxpayers’ expense — or both.”

This would also mean, the Fed will be “free to impose negative nominal interest rates on all dollar-holders,” and further raising serious concerns about privacy because the government will be able to track every single dollar spent.

Fed’s Involvement would make Payments Easier

On the other hand, Neha Narula, the director of the Digital Currency Initiative at the Massachusetts Institute of Technology’s Media Lab, makes the case for digitizing the U.S. dollar which she said would make payments easier.

The current cashless payments systems rely on financial intermediaries and aren’t much different from paper checks that means their fees are higher, slow settlement, and micropayments are almost impossible.

“The U.S. could help pave the way for faster, cheaper and more secure payments by allowing consumers to hold central-bank-issued digital currency outside of commercial banks.”

As for the Fed-issued digital currency, it could coexist with physical cash or Fed could provide accounts directly to consumers and businesses, said Narula. She went on to say,

“A Fed-issued digital currency would need to be carefully designed, implemented and regulated to reduce the risk of fraud, protect privacy and ensure that commercial banks aren’t drained of the funds they need to make loans.”

According to her, if the US does not embrace this opportunity someone else will. There is already exciting experimentation happening with cryptocurrencies, leaving innovation to private companies could mean a small number of large companies dominate and control payments, stifle competitors, and “undermine the Fed’s ability to set monetary policy and regulate financial flows.”

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Author: AnTy

Brazil Central Bank To Roll Out PIX, A Non-Crypto, QR-Based ‘Near Instant’ Payment System

Brazil’s Central Bank is set to launch a new payment system which it claims will offer near instant fund transfers. The new payment system is set to be released in November, Cointelegraph reports.

The new system will be referred to as PIX, a short form for Brazil’s Instant Payment Scheme. The platform will allow for peer-to-peer as well as business-to-business (B2B) transfers within 10 seconds through mobile phones, selected ATMs and internet banking.

In a press statement released on Feb. 20, all payment and financial institutions that are regulated by Brazil’s Central Bank are mandated to give out the requisite functionalities to their active clients for smooth facilitation of the PIX transfers. The press statement also indicates that QR Codes will be used for execution of transactions. Users can also use identification details like taxpayer identification number, phone number or email.

An Answer To Cryptos

Cointelegraph reports that the head of the central bank Roberto Campos explained that the new platform is set to directly compete with payment systems that are based on distributed ledger. He stated that the idea behind the creation of PIX was necessitated by the desire to have a payment platform that is secure, transparent, cheap and fast. He added that the new system is set to have characteristics as those of Bitcoin and other cryptos.

Campos also stated that the PIX platform will be the central bank’s top priority this year. He went ahead to state that the platform will be instrumental in eliminating the need for individuals to always have physical currencies which leads to a high cost for the society.

The statement also states that the central bank and Brazil’s Treasury Secretariat have already inked a deal which will allow Brazilians to remit their federal taxes through PIX starting from November this year. In addition, the Brazilian government is set to provide various payments like income tax refunds, grants, social benefits via PIX in the near future. The aim is to enhance mass adoption of the platform.

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Author: Joseph Kibe

Contents Protocol Refunds $8M ICO, Shuts Down Due To Crypto’s Negative Perceptions

Content-sharing platform, Contents Protocol has announced on Wednesday that is shutting down and will refund investors the $7.5 million worth of Ether (ETH) that were raised in the initial coin offering (ICO). Here’s what the Contents Protocol announcement from the official website reads:

“We inform you that due to continued regulatory uncertainties in cryptocurrency and lack of business prospects, we have decided to end our project.”

A WATCHA Play Subsidiary

Contents Protocol became an ICO market player later, completing its crowd sale in December 2018. As a subsidiary of the Korean streaming service WATCHA Play, it was designed for incentivizing content sharing by offering its reviewers of show and films rewards in its native token, the CPT. However, it had to shut down, explaining that it had too few users because people have a negative perception when it comes to cryptocurrencies. It also said that it doesn’t expect the anti-crypto attitudes to change very soon either.

$7.5 Million Worth of Assets Converted Back into ETH

In its public and private ICOs from 2018, Contents Protocol managed to raise 29,333 ETH (worth $8.1 million). The remaining assets, valued at about $7.5 million, have been converted back into ETH after the shutdown, remaining to be redistributed to investors who made requests for refunds. The company said the collected CPTs are going to be destroyed as soon as the liquidation process begins, so the users holding the tokens will be able to exchange them at the $0.002 worth of ETH until then.

According to the asset records provided by the firm, about 3,800 ETH were exchanged into $1.45 million for funding business operations. While a part of the funds has been converted into Bitcoin (BTC), most of the assets remained in Ethereum (ETH).

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Author: Oana Ularu

Crypto Custodian, BitGo, Acquires Harbor to Expand its Digital Currency Services

BitGo has announced that it will soon be an all-stack digital currency service provider following the acquisition of Harbor. The crypto custodian also acquired Harbor’s business subsidiaries which include a transfer agency and broker dealership for digital currencies.

The beauty about Harbor’s existing operations is that they are legally under the supervision of the Financial Industry Regulatory Authority and SEC. According to the announcement made on Feb 18, BitGo has already initiated the process of a transfer of functions with both FINRA and the SEC. This milestone will allow BitGo to implement a replica of traditional financial services within its tokenomics.

Mike Belshe, the CEO of BitGo, was keen to note that the firm’s vision was always bigger than its current business as a custodian;

“Our vision has always been bigger than wallets and custody and acquiring Harbor furthers BitGo’s vision of building a new digital infrastructure for financial services.”

This acquisition is clearly a big deal for both BitGo and Harbor given its mutually beneficial nature. The former however seems to have been the bigger winner since BitGo will now be the first firm to have an agency, broker and custodian license for crypto assets. Harbor on the other hand stands to leverage BitGo’s custodial services although a clear roadmap is yet to be defined.

Josh Stein, Harbor’s CEO, is also expected to join BitGo as part of the acquisition deal. He however mentioned that they have previously worked together with BitGo given both provided services that the other didn’t have;

“BitGo has been an important partner since Harbor inception. We’ve worked closely together to integrate BitGo Business Wallets and BitGo Custody into Harbor’s services.”

Belshe is optimistic that consolidating services will reduce the barriers to entry in the crypto market. In addition, BitGo will scale its security token services to a number of functions including issuing, transferring and trade executions.

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Author: Edwin Munyui

Here’s How Bitcoin Bull Run Will Start at $20,000

  • CNBC call for a 17% upside in bitcoin price
  • A wave of investors driven by FOMO will enter when we break into a new high
  • Bitcoin’s investment flow presently growing an order of magnitude (10x) every 4 years – on-chain analyst

Bitcoin price is still hovering around $10,250, not continuing the momentum but not sliding down either.

However, with CNBC making a call for a bitcoin boom, it might be time to get ready for a drop as CNBC’s call for bitcoin works as a reverse indicator.

According to the mainstream media outlet, despite bitcoin’s pull back above $10,000, the rally is far from over. MKM Partners chief market technician JC O’Hara told CNBC on Wednesday,

“When we look at cryptos as a whole, they tend to trade in two distinct phases. The first being dormant consolidation, which is followed by phase two, which is a high-momentum phase.”

“When you look at bitcoin we’re starting to see signs that the dormant consolidation from the second half of last year is slowly starting to change in terms of positive bullish momentum here.”

CNBC: A 17% Upside Coming

On a year-to-date basis, the world’s leading cryptocurrency has surged over 38% after finding a bottom in December. Ever since then, bitcoin has been on a steady rise. O’Hara said,

“We broke out of the downward sloping trend channel. We’re breaking above the $10,000 psychological level, and we’re of the opinion that positive momentum will continue to follow positive momentum. So that’s why we think in the short term we could see $12,000 on bitcoin.”

Currently, bitcoin is trading at $10,250 and a move to $12,000 would imply an upside of 17% from the current levels. Back in July, last year bitcoin briefly topped at $13,900 but we have yet to break into an all-time high.

Open field above $20,000

Bitcoin, the best performing asset of the decade with an upside of nine million percent would pull in another wave of investors driven by FOMO when we break into a new high, according to Jake Chervinsky, Counsel at Compound Finance.

Bitcoin remains a speculative asset for the newbies, he said while sharing his first foray into bitcoin which was after the flagship cryptocurrency made an ATH during the bull market of 2017 at $3k despite having heard of it in 2015. And this is why the bull market will start at $20,000. Vijay Boyapati said,

“Once the prior all time high is breached, there is no longer an overhang of supply. The price is free to run wild in an “open field”. This is when Bitcoin’s price appreciation begins to accelerate apace.”

Bitcoin making new all-time highs, Boyapati explained last June, will trigger a “feeding frenzy,” that will see media attention returning and new entrants attracted by the “allure of quick profits” which in turn even drive prices higher even faster. And that’s when the price will “eventually reach a crescendo top.”

Still too early to be an alternative to traditional stocks?

Mark Tepper, president of Strategic Wealth Partners, is also dipping a toe into bitcoin as he shared with CNBC,

“Overall, we’re seeing investors just continue to diversify away from traditional stocks and bonds towards alternatives. Bitcoin could fit into that alternative sleeve, but I still think it’s a little too early.”

Tepper holds bitcoin but hasn’t become a believer yet because according to him, it is “not an investment just yet still a speculative play.

However, on-chain analyst Willy Woo noted, in 2019 Visa processed $8.8T through their network while Bitcoin processed $727b meaning Visa accounts for 10% world GDP (payments) and Bitcoin 1%. Analyst Woo said,

“Bitcoin’s investment flow (aka annual investment velocity) is presently growing an order of magnitude (10x) every 4 years.”

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Author: AnTy

Australia Releases Roadmap To A ‘Blockchain-Empowered Future’

The Australian government will release its national blockchain roadmap on Friday, February 7, after almost a year of preparations.

It’s been about a year since the Ministry for Trade, Tourism and Investment and the Ministry for Industry, Science and Technology in Australia have made the announcement for the country’s national blockchain strategy that aims for global leadership and focuses on the wine, finance and banking sectors.

Domestic Wine to Receive Special Attention

Talking about the development of the program, Karen Andrews from the Ministry for Industry, Science and Technology mentioned the 5-year blockchain will highlight the work of researchers, startups, and regulators.

Since the wine sector in the country is set to have the AU$259.4 billion ($175 billion) worth, Andrews said blockchain technology is capable of strengthening export opportunities, seeing manufacturers will be able to trace their goods, especially when it comes to wine labeling and exports. 2,000 wine exporters in Australia ship to 123 destinations all over the world.

How Much Did Australia Spent on Blockchain?

The Australian government hasn’t yet allocated funds for the blockchain roadmap implementation. As it was noted in March 2019, some previous investments made by the liberal national government of Prime Minister Scott Morrison helped fund the Digital Transformation Agency in 2018-2019 with AU$700,000 (approx. $500,000) to explore what benefits the use of blockchain would bring to government payments.

It also funded Standards Australia with AU$350,000 (approx. $250,000) to create a set of guidenance for international and standardized blockchain standards.

How Much Other Countries Spent on Blockchain

The science and technology multi-stakeholder operation Centre for the Fourth Industrial Revolution UAE, together with the World Economic Forum and the Dubai Future Foundation, has released in January this year a paper that says deploying blockchain technology can save the United Arab Emirates (UAE) over $3 billion.

In the meantime, an important firm in Russia has recently decided to cut the country’s spending on blockchain development by half. The government-backed company Rostec wants to spend only 28.4 billion Rubles ($453.2 million) for developing blockchain technology by 2024, and not 55 billion ($877.8 million) or 85 billion Rubles ($1.3 billion), as it initially said it would.

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Author: Oana Ularu

Ethereum’s ConsenSys Announces Staff Cuts By 14% While Also Acquiring Broker-Dealer

The Ethereum development studio ConsenSys is doing a major restructuring of its business and will cut staff by 14%, as it aims to raise $200 million.

The Brooklyn-based company announced at a meeting with its entire staff from Tuesday that changes are about to be made. When inquired by the press about how many people are going to be fired more exactly, or how many employees it has, it gave no answer. This is what a statement from the firm reads:

“In the coming months, ConsenSys will finalize the transition from its venture production model and spin out a number of its internally funded projects into the ConsenSys Investments portfolio.”

Prioritizing the Development of Some Ethereum Platforms

The intention is to bring leading infrastructure platforms in the Ethereum (ETH) ecosystem to the forefront in development processes. ConsenSys said they will,

“operate a software business composed of several of its products optimized for a modular stack.”

There are sources saying Codefi, MetaMask, Pegasys and Infura are going to receive the most attention.

ConsenSys Investments Will Continue to Exist

The venture aspect will still be alive under the ConsenSys Investments banner. They said liquid digital assets, early-stage equity and strategic opportunities will be in the spotlight. It added the “Solutions” arm, which is enterprise-focused, is going to provide directly for the software business.

13% of the Staff Laid Off Back in 2018 Too

During the ConsenSys 2.0 restructuring from 2018, the company laid off around 13% of its employees. It seems the recent action was a result of thorough evaluations of the projects during the 2019 year. In the meantime, it’s attempting to break into the $3.8 trillion municipal debt market.

A separate announcement made on Tuesday says it has acquired Heritage Financial Systems, the famous broker-dealer, in an attempt to become both a broker-dealer and advisory firm. ConsenSys thinks blockchain technology can make things easier when it comes to tokenized bond offerings, especially since it helps issuers sell smaller denominative securities, or mini bonds.

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Author: Oana Ularu

Gartner Blockchain Report: Smart Contracts To Boost Data Quality by 50% In 3 Years

  • Research shows that blockchain technology will increase overall data quality by over 50% in the next three years.
  • However, the overall data availability to organizations in various sectors of the economy will dip by 30% or more by 2023.

In a new report, “Predicts 2020: Data and Analytics Strategies — Invest, Influence and Impact” by Gartner Inc., a global research and advisory firm, the overall data accuracy and quality is set to boost by 50% in the next three years due to blockchain technology adoption. Companies that adopt blockchain smart contracts will however have to do with less data as the middle men (third party data collectors) get annihilated from the P2P system.

According to the pay-walled article, companies that adopt blockchain technology and transact using smart contracts are set to improve their data quality by 50% by 2023. Lydia Clougherty, senior researcher at the firm sees the adoption of blockchain as a key differentiating factor in all businesses and organizations as she wrote in a recent blog,

“When an organization adopts blockchain smart contracts, whether externally imposed or voluntarily adopted, they benefit from the associated increase in data quality.”

A (net positive) tradeoff?

The report however warns on the reduced availability of data as the companies that acted as middlemen to collect and sell the data are cut off by peer to peer blockchain systems. In the next three years over 30% of the data available to companies will be cut off according to the report as these companies are cut off. Is this a healthy tradeoff?

Well, according to the report, the net effect is positive for data analysts and researchers who despite losing the ease of data collection will see their return on investment rise steadily as adoption rises. However, the smart contract technology is still way behind in adoption as the report states and a lot is yet to be done to increase global adoption.

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Author: Lujan Odera

TokenSoft Debuts New Wallet Enabling Investors to Self-Custody Security Token Investments

TokenSoft, a US licensed security token platform, has launched a new wallet that will make it easier for investors to self-manage their security tokens accounts, CoinDesk reports.

The new offering, which was revealed on Thursday, provides the platform users with an easy to use and highly secure wallet where they can hold as well as control their investments. The new product also comes with an automated dividend distribution as well as an in-built reporting mechanism for the token issuers. If a client has more than $1 billion worth of investments, they can use the multi-signature security tool. Mason Borda, TokenSoft CEO, expressed his gratitude for the new product. He said:

“We’re excited to bring a multi-signature wallet security packaged in a self-controlled, easy to manage brokerage-style experience to the over 100,000 investors using our platform.”

The new product by TokenSoft supports different security tokens which adhere to the set regulatory requirements such as Tezos’ FA1.2and ERC-1404.

According to the firm’s head of business development, Jordan Davis, the TokenSoft Investment Accounts wallet will add more pressure on financial companies to provide investors with improved services as well as management tools. He said:

“People will be able to add or remove service providers from accessing their assets the same way you can add or remove profiles from your Netflix subscription.”

Tokensoft’s subsidiary, DTAC LLC, obtained a transfer agent’s license from the U.S. Securities and Exchange Commission (SEC) which is an imperative step on the firm’s quest to introducing tokenization in the conventional securities and finance industry.

Borda has previously explained that TokenSoft is gearing to offer the technology necessary for companies to go for an IPO through putting the shares within a blockchain network or platform. Borda also explained that TokenSoft is developing the requisite aspects required for a virtual investment bank.

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Author: Joseph Kibe

NEXO Introduces 50% Interest Discount on Instant Crypto Credit Lines to Reduce Supply

  • NEXO’s utility features will now show a significant rise with the Discounted Interest of 50% on its Instant Crypto Credit Lines, using the Nexo Token.
  • The company is hard at work on the Utilities 2.0 Overhaul of their NEXO Token with a goal of bringing a host of new utility features.

NEXO will begin to execute a new improved policy of the 50% Interest Discount on its Instant Crypto Credit Lines, starting February 10th, announced the company on Wednesday. With the upgrade, the company says NEXO holders will see gains as “NEXO Token will experience a notable boost in its utility features.”

To collect the whole 50% discount, the company says customer’s wallets need to have sufficient Tokens to “cover the interest for the entire period from the moment of withdrawing funds from the credit line up to their desired moment of repayment.”

Customers that own staked NEXO Tokens for only a portion of the length of their loan, will collect on the discount that corresponds with the amount of days.

Customers that would like to benefit from the new Discount can also now use, NEXO, AUD, Stellar, USD, EOS, Bitcoin, as well as Bitcoin Cash, GBP, Ether, Litecoin, XRP, EUR and with all major stablecoins, with more assets coming soon for making repayments using all the assets accessible on the platform.

NEXO Token Holders Benefits

With the new changes, the company says it was designed to benefit the customers and owners of the tokens. Apart from providing the entire 50% Discount from the staking of their tokens, it allows holders to collect higher dividends.

Already, the company says it has allocated more in profits than all others in the blockchain ecosystem. Its dividend yield NEXO says has reached an “impressive 12.73%,” that surpasses “each of the highest dividend-paying stocks in the S&P 500.” Also, this “balances market volatility and results in a higher, more stable demand for NEXO Tokens.”

The company further says this upgrade will help in all long-term investors confidence by attracting customers to stake their NEXO Tokens over longer periods, which will lower the available market supply.

The 65th largest cryptocurrency currently has 560,000,011 NEXO tokens in circulating supply. At the time of writing, NEXO/USD has been trading at $0.139897 with 24 hours gains of 3.56%. If the supply of NEXO gets reduced while demand either stays the same or increases, the price is expected to take a jump.

Meanwhile, NEXO is planning further improvements and is working on revamping the NEXO Token Utilities 2.0, which can quickly usher in several utility features including higher Nexo card cashback, higher affiliate commissions, and better interest rates on both our ‘Instant Crypto Credit Lines’ and ’Earn Interest’ products.

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Author: AnTy