Advertisements

Alibaba, Tencent, Five Others To Receive First Chinese Government Cryptocurrency

1.jpg

China’s central bank will launch a state-backed cryptocurrency and issue it to seven institutions in the coming months, according to a former employee of one of the institutions who is now an independent researcher. Paul Schulte, who worked as global head of financial strategy for China Construction Bank until 2012, says the largest bank in the world, the Industrial and Commercial Bank of China, the second largest bank in the world, his former employer, the Bank of China, the Agricultural Bank of China; two of China’s largest financial technology companies, Alibaba and Tencent; and Union Pay, an association of Chinese banks, will receive the cryptocurrency.

A separate source, who’s involved in the development of the cryptocurrency, dubbed DC/EP (Digital Currency/Electronic Payments), confirmed that the seven institutions would be receiving the new asset when it launches, adding that an eighth institution could also be among the first tier of recipients. The source declined to provide the name of the additional company. Speaking under terms of anonymity, the source, who previously worked for the Chinese government, confirmed that the technology behind the cryptocurrency has been ready since last year and that the cryptocurrency could launch as soon as November 11, China’s busiest shopping day, known as Singles Day.

At the time of launch, the recipient institutions will then be responsible for dispersing the cryptocurrency to 1.3 billion Chinese citizens and others doing business in the renminbi, China’s fiat currency, according to the source. The source added that the central bank hopes the currency will eventually be made available to spenders in the United States and elsewhere through relationships with correspondent banks in the West. “That’s the plan, but that won’t happen right away,” the source said.

The plan to use a diverse set of China’s trusted intuitions to disperse the cryptocurrency is reminiscent of a number of other ideas currently percolating around the world. For instance, Facebook’s planned libra cryptocurrency will be backed by a basket of currencies issued by central banks with support from companies like Mastercard and Uber in the United States, Vodaphone in England and Mercado Pago in Argentina. And last week, Bank of England governor Mark Carney floated the idea of a new currency backed by a number of central banks to replace the U.S. dollar as the global reserve currency.

What sets China’s DC/EP apart from libra and Carney’s “synthetic hegemonic currency” (SHC), according to Shulte, is that while libra is little more than early-stage computer code and the SHC doesn’t appear to have gone much further than Carney’s mind, the Chinese cryptocurrency is ready to launch. “China is barreling forward on reforms and rolling out the cryptocurrency,” says Schulte, who now runs an eponymous bank research firm. “It will be the first central bank to do so.”

At the time of publication, neither the People’s Bank of China nor any of the seven institutions mentioned by Schulte had responded to Forbes requests to confirm or deny his claim. However, the two-tiered strategy, where the central bank creates the currency and others distribute it, aligns with previously unreported statements made by Mu Changchun, deputy director of the Paying Division of the People’s Bank of China (PBOC) and the new head of China’s cryptocurrency research lab. In a speech on August 10 at the China Finance 40 Forum, since revised and posted on the PBOC’s WeChat channel, Mu described the central bank’s “two-tiered” system, wherein the bank would create the cryptocurrency and a small group of trusted commercial businesses would “pay the central bank 100% in full” to be allowed to distribute it.

In addition to preventing regional banks and other organizations from being disintermediated, Mu said the two-tiered system is designed to “curb” public demand for other cryptographic assets, consolidate China’s national currency sovereignty, ensure that the central bank maintains control over monetary policy affecting the currency, increase the likelihood of people using the currency, distribute the risk of having all the authority directly in the hands of the central bank and encourage competition between the organizations that receive the cryptocurrency.

“This dual delivery system is suitable for our national conditions,” said Mu. “It can not only use existing resources to mobilize the enthusiasm of commercial banks but also smoothly improve the acceptance of the digital currency.”

The composition of the organizations Schulte says will receive the DC/EP also aligns with Mu’s comments. Later in his speech, Mu added that only after the technical specifications for the DC/EP were completed in 2018 did the central bank realize the similarity between its design and that of libra, the cryptocurrency being developed by Facebook and about 30 other early-stage partners.

One key difference, according to Mu, is that while libra is being designed to handle 1,000 transactions per second, the DC/EP was designed to handle 300,000 transactions per second. For context, Mu added that during last year’s Singles Day the peak volume of all transactions in China was 92,771 transactions per second, dwarfing what the other platforms could support, but well within the DC/EP specifications. “At present, we belong to a state of horse racing,” Mu said according to the translation.

How Blockchain Went From Bitcoin To Big Business| 37:20

The DC/EP can achieve this kind of volume only because it is not a “pure blockchain architecture,” according to Mu, and therefore it doesn’t need to wait for groups of transactions to settle in a block. Like other permissioned blockchains that not anyone can use, the DC/EP is centrally managed, in this case by the central bank, meaning the digital currency remains a liability of the bank and the debtor/creditor relationship is unchanged, according to Mu. Also, instead of using an algorithm to limit supply, like bitcoin, Mu says the PBoC itself will control supply. Crucially, Mu says, the DC/EP is being designed to replace the physical notes and coins in circulation, not the renminbi sitting in bank accounts in a digital form.

“The central bank’s digital currency can be circulated as easily as cash,” said Mu. “Which is conducive to the circulation and internationalization of the renminbi.”

Whether anyone outside China would actually use a digital renminbi for transactions in their own country is unclear. As the Bank of England governor’s comments about replacing the U.S. dollar indicate, much of the world is tired of having their financial stability tied to the United States’ monetary system. But China may not be the best alternative. Earlier this month, as part of the escalating trade war between the United States and China, U.S. President Trump accused China of being a “currency manipulator.” After China’s renminbi fell to its lowest in 11 years, hitting 6.9225 renminbi per dollar on August 5, according to a Financial Times report, it has recovered significantly, trading at 7.15 renminbi per dollar today. While China has denied the charge and called the U.S. “protectionist” in a press statement, the perception of manipulation could be harmful to broader adoption of a digital currency linked to the renminbi.

In December 2017, another country accused of devaluing its currency, Venezuela, revealed plans for its own cryptocurrency, backed by oil and called the petro. After much hullabaloo, the currency somewhat officially launched in 2018, but it isn’t available on most international exchanges because of a U.S. embargo and has been almost impossible to accurately value. Another obstacle to adoption could be uncertainty about the benefits of a technology that’s intended to replace fiat currency but is still under centralized control. While it’s obvious that any central bank wishing to more closely observe how citizens are using a cryptocurrency would prefer a transparent ledger like the bitcoin blockchain, which makes transactions easily traceable, most of the benefits to users of current blockchains, such as instant settlement and digital transactions without the need of a middleman, could be undermined by central control.

One person who’s not concerned about the obstacles to adoption of China’s cryptocurrency is Charles Liu, chairman of HAO International, a private equity firm investing over $700 million in Chinese growth companies. After largely focusing on solar, organic fertilizer, and wastewater treatment technologies since 2012, Liu says he is an angel investor in “the first blockchain company to be able to sign an official contract with the People’s Bank” of China.

Liu declined to reveal the name of the firm or its technology but lent support to Mu’s comments about the potential benefits to businesses using China’s cryptocurrency. In addition to being a more efficient way to track money laundering, bribery and other transactions, Liu says, the cryptocurrency will give banks increased confidence in the creditworthiness of borrowers, let merchants receive payments instantly and lower transaction fees. While Liu says that banks in the United States have been resistant to such improvements that eat away at their bottom line, he adds that China doesn’t have that problem, because the government owns the banks.

“What will facilitate commercial transactions and enhance efficiency, the central government decides and they go ahead and do it,” says Liu, adding that “China’s strategic plan is to integrate more closely with the rest of the world. Cryptocurrency is just one of the means to have a more internationalized renminbi. It’s all strategic. It’s all long term.”

Follow me on Twitter or LinkedIn. Send me a secure tip.

I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies such as Bitcoin, Ethereum and Ripple, and extends to non-cryptocurrency applications of blockchain in finance, supply chain management, digital identity and a number of other use cases. Previously, I was a staff reporter at blockchain news site, CoinDesk, where I covered the increasing willingness of enterprises to explore how blockchain could make their work more efficient and in some cases, unnecessary. I have been covering blockchain since 2011, been published in the New Yorker, and been nationally syndicated by American City Business Journals. My work has been published in Blockchain in Financial Markets and Beyond by Risk Books and I am regularly cited in industry research reports. Since 2009 I’ve run Literary Manhattan, a 501 (c) (3) non-profit organization dedicated to showing Manhattan’s rich literary heritage.

Source: https://www.forbes.com

China’s central bank is reportedly on the verge of launching a national digital currency. Investigative Journalist Ben Swann joins Scottie Nell Hughes to discuss the implications. He argues that at some point every country will have its own digital currency. And that there’s “nothing attractive” about such currencies as they’re no better than traditional government-backed fiat currency. #NVHughes #QuestionMore #RTAmerica Find RT America in your area: http://rt.com/where-to-watch/ Or watch us online: http://rt.com/on-air/rt-america-air/ Like us on Facebook http://www.facebook.com/RTAmerica Follow us on Twitter http://twitter.com/RT_America

Advertisements

Grayscale To Move Billions In Bitcoin, Ripple’s XRP, Ethereum, And Litecoin To Coinbase In One Of The Largest Ever Crypto Transfers

Bitcoin and cryptocurrency asset manager Grayscale Investments is today planning to move billions of dollars worth of holdings to U.S. crypto wallet provider and trading platform Coinbase in what could be one of the largest single day transfers of bitcoin and crypto assets ever.

Grayscale, which claims to be the world’s largest bitcoin and digital currency asset manager, is today announcing Coinbase Custody will serve as custodian of the underlying assets for its products, and is expected to transfer nearly $3 billion of assets in fewer than 12 hours to Coinbase.

Coinbase Custody, which is operated as a standalone, independently-capitalized business to Coinbase, will now will oversee Grayscale’s cryptocurrency holdings, including bitcoin, bitcoin cash, ethereum, litecoin, and Ripple’s XRP, among other major tokens, as well as Grayscale’s publicly quoted cryptocurrency trusts and its Grayscale Digital Large Cap Fund, which provides exposure to bitcoin and crypto through a market cap-weighted portfolio.

“Grayscale and Coinbase have led the way in providing safe, secure, trustworthy, and regulated access to digital assets. Grayscale is an established, trusted, and valuable partner to its clients and its service providers should be the same,” said Sam McIngvale, Coinbase Custody chief executive.

“As a NY State-chartered trust company, Coinbase Custody is held to the same fiduciary standards as national banks. We also offer some of the broadest and deepest insurance coverage in the crypto industry.”

The move comes as bitcoin and cryptocurrency investors nervously look for signs of how global regulators will react to Facebook’s plans to launch its own cryptocurrency sometime next year, dubbed libra.

Expectations that some of Silicon Valley’s biggest companies, including iPhone-maker Apple and micro-blogging platform Twitter, are increasingly looking to bitcoin and cryptocurrencies as a potential source of revenue has been largely responsible for the rise in the bitcoin price so far this year.

Earlier this month, the New York-based Grayscale reported assets under management of $2.7 billion, an all-time high for the company and up three-fold on the previous quarter.

Last month, Coinbase, the largest U.S. cryptocurrency exchange and wallet service, boasted it has signed up 30 million users since launching in 2012, with eight million new users added over the last 12 months.

Meanwhile, Grayscale last week found that more than a third (36%) of U.S. investors would consider buying bitcoin, representing a potential market of more than 21 million investors.

“Since its introduction in 2009, bitcoin has steadily grown in popularity and today has expanded its reach to a broad mainstream audience,” Grayscale reported.

“Investors are constantly looking for new ways to diversify their portfolios as traditional assets and markets have begun to move more closely in sync with one another.”

Follow me on Twitter.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com. Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

Source: Grayscale To Move Billions In Bitcoin, Ripple’s XRP, Ethereum, And Litecoin To Coinbase In One Of The Largest Ever Crypto Transfers

20% of 18-34 Year Olds in America ‘Own Bitcoin,’ Recent Survey Reveals – Omar Faridi

Spencer Bogart, a general partner at Blockchain Capital, recently revealed the results of a survey which suggest that despite the extended cryptocurrency bear market, “Bitcoin awareness, familiarity, perception, conviction, propensity to purchase and ownership all increased/improved significantly.”

According to a blog post, published on April 30th, 2019, by Bogart, the survey “results highlight that Bitcoin is a demographic mega-trend led by younger age groups.” Bogart also wrote that the “only area where older demographics matched younger demographics was awareness.”

Notably, the survey was “conducted online by The Harris Poll, on behalf of Blockchain Capital, from April 23–25, 2019 among 2,029 American adults.”

Most Americans Have “Heard Of Bitcoin”

Bogart, a business economics graduate from the University of California, Santa Barbara, explained that those surveyed had a relatively high awareness about cryptocurrencies. He noted that “regardless of age, the vast majority of the American population has heard of Bitcoin.”

As mentioned in Bogart’s blog, the “percentage of [US residents] that have heard of Bitcoin rose from 77% in October 2017 to 89% in April 2019.”

18-34 Year Olds Have “Highest Rate Of Awareness”

Moreover, the survey results indicated that overall “awareness of Bitcoin is strong across all age groups — those aged 18–34 have the highest rates of awareness at 90% and those aged 65+ have the lowest at 88%.”

60% Of 18-34 Year Olds Are “Somewhat Familiar” With Bitcoin

When compared to last year, the “percentage of people that have not heard of Bitcoin fell by more than half — from 23% in October 2017 to 11% in April 2019,” the survey data revealed.

Approximately 60% of survey participants aged between 18 and 34 said that they were “at least ‘somewhat familiar’ with Bitcoin — up from 42% in October 2017.” Moreover, Americans between the ages of 18 and 34 are “3x as likely to be at least ‘somewhat familiar’ with Bitcoin as those aged 65 and over,” the survey data suggested.

More Americans Now Believe Bitcoin Is “A Positive Innovation”

Other notable survey results indicate that the “percentage of [Americans] who ‘strongly’ or ‘somewhat’ agree that ‘Bitcoin is a positive innovation in financial technology’ rose 9 percentage points — from 34% in October 2017 to 43% in April 2019.”

Meanwhile, the “younger demographics were most inclined to have a positive view of Bitcoin,” the survey results suggested. In fact, around “59% of those aged 18–34 ‘strongly’ or ‘somewhat’ agree that” the Bitcoin protocol will have a positive impact on the world’s existing financial system. Notably, the overall positive attitude towards Bitcoin (BTC) among younger US residents increased by as much as 11% “from October 2017.”

Many Americans Think “Most People Will Be Using Bitcoin” In The Next Decade

Interestingly, more Americans now believe that “most people will be using Bitcoin in the next 10 years.” According to survey data, the percentage of US citizens who think Bitcoin will play a significant role in the future economy increased “ from 28% in October 2017 to 33% in April 2019.”

Survey results also indicate that “48% of those aged 18–34 ‘strongly’ or ‘somewhat’ agree that ‘it’s likely most people will be using Bitcoin in the next 10 years’ — up 6 percentage points from October 2017.”

Significantly More Americans Are Now Planning To Buy Bitcoin

According to recent survey data, 27% of Americans said “they are ‘very’ or ‘somewhat’ likely to buy Bitcoin in the next 5 years” – up “from 19% in October 2017.”

Other key findings from the survey are as follows:

  • “21% of [US residents] said they would prefer Bitcoin to government bonds — up from 18% in October 2017,”
  • “17% of [US residents] said they would prefer Bitcoin to stocks — up from 14% in October 2017,”
  • “14% of [US residents] said they would prefer Bitcoin to real estate — up from 12% in October 2017,”
  • “12% of [US residents] said they would prefer Bitcoin to gold — up from 8% in October 2017,”
  • “11% of the [American] population owns Bitcoin — including 20% of those aged 18–34 and 15% of those aged 35–44.”

Source: CryptoGlobe

VOLENTIX SUPPORTER FOR CRYPTOCURRENCY ADOPTION

In the past few years, we are facing a new phenomenon that brings significant changes to the financial transaction system. If at first we make money transfers through bank services, we can now do it personally through our own hands. The world is now in the grip. To just make a transaction, we don’t need to move one step. The new system developed in this decade provides enormous convenience for conducting digital transactions. for payment instruments now using digital tokens or coins. this fact has become a very serious conversation throughout the world both in the private life of the community and in international forums. How not, this new system does not even require more fiat money as a means of payment……

Source: VOLENTIX SUPPORTER FOR CRYPTOCURRENCY ADOPTION

Mark Zuckerberg: “Encryption is decentralizing” | Crypto Insider

 

On March 6, Mark Zuckerberg published a 3000+ word essay “A Privacy-Focused Vision for Social Networking”. In the essay, he outlines the problems faced by Facebook, the Internet and the society, as well as his vision of the future.Lately, the rumors have been swarming about Facebook adding blockchain technology and even introducing its own cryptocurrency. In relation to this series of events, it remains to be seen if Mr. Zuckerberg provides any validation for the rumors mentioned in his address.

Source: Mark Zuckerberg: “Encryption is decentralizing” | Crypto Insider

 

 

Komodo to Soon Release Atomic Swap-Enabled Trading App, CTO Reveals

Cryptocurrency exchanges have been under fire so far this year, as hackers have kept on targeting them and other events hurt the confidence users have in certain platforms. Atomic swap technology is set to revolutionize the way we trade cryptocurrencies and more. As CryptoGlobe covered, a Chainalysis report has found that 60% of cryptocurrency exchange hacks were the work of two major players, dubbed “Alpha” and “Beta.” Alpha was described as a “giant, tightly controlled organization partly driven by non-monetary goals” that appeared eager to “create havoc as to maximize profits.”

Source: Komodo to Soon Release Atomic Swap-Enabled Trading App, CTO Reveals

Why Need Real ATMs for “Unreal” Money?

Over the last three years, the number of cryptocurrency ATMs has increased by 700%. This is indicated by data from the DRIVE Markets exchange. According to the company’s research, on January 1, 2016, 501 automatic teller machines for digital coins were in operation, and in 2019, the figure has reached 4,128. Experts believe this trend is related to the growing popularity and confidence in the crypto industry and the simplicity and accessibility of the devices compared to digital assets exchanges…………….

Source: Why Need Real ATMs for “Unreal” Money?

This week’s bad news for exchanges has been terrible for crypto

The disastrous and seemingly unending hack which devastated New Zealand exchange Cryptopia was only the first in a series of bad news coming from various crypto exchanges the past week, with Canadian exchange QuadrigaCX ‘losing’ about $190 Million worth of crypto following the death of a founder and the subsequent loss of access to a private key, as well as the sudden and unexpected insolvency of Coinpulse……………

Source: This week’s bad news for exchanges has been terrible for crypto

Crypto Markets Show Signs of Recovery Following Severe Losses

The vast majority of cryptocurrencies are recovering after experiencing severe losses over the last several days, according to Coin360. Of the top 20 by market capitalization, only the stablecoins USD Coin (USDC) and Tether (USDT) are still in the red. The leading cryptocurrency Bitcoin (BTC) has seen an increase of nearly five percent on the day, and is trading at around $3,717 at press time. As Cointelegraph reported earlier, BTC hit a new year-to-date low today, slumping to as low as $3,544. On its weekly chart, Bitcoin’s highest price point was $4,107 on Jan. 9…………

Source: Crypto Markets Show Signs of Recovery Following Severe Losses

%d bloggers like this:
Skip to toolbar