Bitcoin Could Emerge As A ‘Threat’ To US Dollar In Future, Suggests St. Louis Fed Chief

A top US policy maker made mostly positive remarks about Bitcoin, also not ruling it out as a potential “threat” to the US dollar, in an interview with CNBC Monday, May 14.

Speaking to CNBC on the sidelines of the Consensus 2018 conference in New York Monday, St. Louis Fed president James Bullard also identified positive aspects of cryptocurrency, namely revolving around cutting costs in trade. He stated that crypto is “facilitating trade that would not otherwise occur. Some of that’s illegal, but some of that is avoiding costs that would otherwise be there.”

Asked whether Bitcoin was a threat to the US dollar, Bullard voiced uncertainty about the  potential competition the leading cryptocurrency could pose, saying, “I don’t think so at this point […]. We don’t know how the future’s going to unfold.”

“My idea is that there’s a lot of currency competition going on right now,” Bullard meanwhile continued on the topic of dollar supremacy, adding:

“The dollar has been the winner historically because it’s backed by the largest economy and a relatively stable policy in terms of low inflation and that’s going to be tough to beat. But a lot of people here want to beat it.”

On the topic of blockchain, Bullard was much more openly bullish, saying:

“we think blockchain technology is very interesting [..] we want to be very engaged and thoughtful as this proceeds.”

He also responded to a question of whether or not the Fed was considering issuing its own cryptocurrency, saying noncommittally, “we can certainly look at that as a possibility. And there are different parts of the Fed that look at all kinds of applications of blockchain technology. But I wouldn’t say there’s any plan at this point.

The comments continue the trend of general crypto support from the St. Louis Fed. In January this year, the reserve bank published a dedicated paper titled “A Short Introduction to the World of Cryptocurrencies” in which researches forecast it was “likely” that Bitcoin and altcoins would “emerge as their own asset class.”

Japanese Regulator Sees Sharp Spike in Cryptocurrency Queries in Q1 2018

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Japanese consumers are filing over three times the number of cryptocurrency enquiries  in the first three months of 2018 compared to the previous quarter, figures from the country’s financial regulator reveal.

According to numbers disclosed by the Financial Services Agency’s (FSA) Counseling Office for Financial Services Users on Friday, the authority fielded a total of 3,559 enquiries about cryptocurrencies during Q1 2018. That figure is up over 3 times from that of the final quarter of 2017 with a total of 1,141 enquiries at the time, underlining the frenetic growth in interest in cryptocurrencies.

36 percent of the total inquiries related to general questions whereas 29 percent, a little over 1,000 queries related to their administration (regulation). A further 23 percent of those questions pertained to specific crypto-related transactions and individual contracts.

The numbers represent a similar growth trend in consumers’ interest in cryptocurrencies, as revealed during a recent cryptocurrency exchange study group meeting hosted by the FSA in late April this year.

Citing data [PDF] gathered and released by Japan’s Consumer Affairs Agency (CAA), the agency saw a total of 2,679 broad inquiries filed in 2017 by general consumers broadly on cryptocurrencies and initial coin offerings (ICOs), up from 847 in 2016, 440 in 2015 and a relatively mere 186 in 2014.

According to the FSA’s own figures, taken from a survey of 17 domestic cryptocurrency exchanges, the country has some 3.5 million active cryptocurrency traders as of figures released in early April. A majority of those traders are aged between 20 and 40 years, with a third of the group in their 30s. Bitcoin trading leads the way, reaching $97 billion in 2017, a striking increase from a trivial $22 million in 2014. Ethereum, Ripple, Bitcoin Cash and Litecoin all figure among the most traded cryptocurrencies in Japan after Bitcoin.

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Largest Credit Bureau In Eastern Europe To Use Blockchain For Customer Data Storage

The Polish Credit Office, Biuro Informacji Kredytowej (BIK), has partnered with UK fintech firm Billon to implement blockchain for customer data storage, according a press release from Billon today, May 14.

BIK, the largest credit bureau in Central and Eastern Europe, is owned by Poland’s leading banks and tracks around 140 mln credit histories, according to the press release. BIK president Mariusz Cholewa has stated that the credit bureau’s cooperation with Billon is “long-term,” and that BIK “believe[s] that blockchain technology will transform how the financial sector communicates sensitive data with clients.”

Cholewa emphasized that the two entities have developed a solution that “meets the legal requirements of a durable medium of information, as well as the requirements of the EU General Data Protection Regulation [GDPR], which comes into force this month.” The system indeed seems to be shaped by the context of GDPR, taking into account the stipulated right to erase personal data.

BIK and Billon have been piloting Billon’s blockchain architecture with eight Polish banks since late 2017, and have reportedly established that the system is capable of publishing over 150 mln documents per month.

As per the press release, Billon terms itself a so-called “civilized blockchain” company, meaning that it implements blockchain to ultimately process fiat currencies. Forgoing cryptocurrencies, it uses ‘E-money’ instead, which is legal tender under the European Commission’s E-Money Directive from 2009. Andrzej Horoszczak, CEO of Billon, said that the data system:

“is the start of a true revolution in information management. It is now possible to move away from the constraints of closed central databases to a democratic blockchain-based Internet where every user will be able to control their identity […] we anticipate [mass blockchain technology] will soon be adopted by industries such as telecommunications, insurance and utilities […] for trusted document management.”

Last month, the Dutch Ministry of Economic Affairs and Climate Policy commissioned a national blockchain research agenda that similarly highlighted the technology’s potential for data management with provisions for privacy, including the “right to be forgotten,” as well as self-sovereign identity management. In an extra-EU context, and with an emphasis on security and automation, China’s official government auditor is now considering a blockchain solution to streamline its colossal data infrastructure.

Zcash Spikes 45% and Ethereum Price Gains 4% in $21 Billion Crypto Market Rebound

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Over the past 24 hours, the valuation of the cryptocurrency market has increased from $387 billion to $408 billion, by more than $21 billion. Major cryptocurrencies like bitcoin and Ethereum have risen in the 3 to 6 percent range while smaller assets such as Zcash (ZEC), Aelf (ELF), Kyber Network (KNC), and Enigma rose in the 10 to 50 percent range.

Zcash: Best Performer

On May 14, privacy-focused cryptocurrency Zcash experienced a 55 percent increase in price after being listed on Gemini, one of the largest cryptocurrency exchanges in the US led by the Winklevoss twins. Subsequent to the official announcement of Gemini, the price of Zcash increased from 0.0293 to 0.0456 BTC, by nearly two-fold.

Gemini CEO Cameron Winklevoss told Bloomberg in an interview said that privacy-focused cryptocurrencies like Zcash have struggled to gain large market valuations in the past due to concerns from investors towards potential crackdown by authorities, as seen in the Japanese cryptocurrency market as of recent.

“Part of the reason a coin like Zcash has a smaller market cap is because people are not sure if regulators will ever get comfortable with this type of technology. Today demonstrates that through education and collaboration and with the right controls in place, regulators can get comfortable with privacy technology,” said Winklevoss.

Over the past month, the Japanese government and the Financial Services Agency (FSA) have continued to restrict cryptocurrency exchanges from dealing with anonymous cryptocurrencies like Zcash and Monero to ensure trading platforms are not used by criminals to launder money.

The listing of Zcash by an exchange like Gemini which is known to be a leading trading platform in terms of compliance and security, is considered as a major milestone for privacy-focused cryptocurrencies and the community in general.

After experiencing an initial 20 percent decline in value, Zcash rebounded to the 0.04 BTC mark and continued to increase to around 0.043. Since earlier today, Zcash has fallen back to the 0.041 mark but as the demand for Zcash and privacy-cryptocurrencies rise on Gemini and in the US market, the price of Zcash is expected to rise even further in the short-term.

While the price of ZCash has already increased by more than 40 percent, the Relative Strength Index (RSI) of Zcash is still in the neutral zone at 66 and both exponential and simple moving averages are demonstrating a positive short-term trend for Zcash.

Where Does Bitcoin Go?

Last week, CCN reported that volume will be a key factor that could lead the market to rebound back to the $450 billion region. Already, the daily trading volume of the cryptocurrency market has increased from $17 billion to $22 billion over the past few days, by nearly $5 billion.

The daily trading volume of bitcoin has also slightly increased to $7 billion and hence, in the short-term, it is likely that the bitcoin price enters the $9,000 region again.

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Polish Financial Watchdog To Fund Anti-Crypto Social Media Campaign

Poland’s Financial Supervision Authority (KNF) is conducting a social media campaign about the risks of investing in cryptocurrency, according to a May 10 post on the KNF’s website. KNF has placed a tender order of 615,000 zloty (around $173,000) to plan and conduct the campaign, which focuses on the risks associated with cryptocurrencies, pyramid schemes, and forex trading.

The KNF’s recent initiative is evidently part of a larger anti-cryptocurrency campaign led by the country’s authorities. In mid-February, the Central Bank of Poland admitted to funding a $27,000 anti-cryptocurrency campaign that specifically consisted of a YouTube video – with no indication that it was sponsored content – about a man who lost all his money in crypto trading.

The Central Bank of Poland and the KNF have also partnered to make an anti-crypto educational website that explains why “virtual currency is not money” and “cryptocurrencies are not currency.”

Also in February, as a response to the government’s efforts, a small film studio released a documentary about cryptocurrency in Poland, called Krypto, with the declared goal of educating the Polish public facts about crypto and blockchain technology.

The KNF’s official post says it will be accepting applications and proposals for the campaign until May 18, and the campaign will begin in June 2018 and last for 30 days. The KNF’s description of the initiative also mentions the promotion of an app referred to as “KNF Alert”.  According to local news outlet Bitcoin.pl, the campaign will include two 30 second video spots, presumably on television.

Poland’s previous anti-cryptocurrency education campaign was received mainly negatively in the country, particularly due to the lack of transparency around the YouTube video’s sponsorship. Poland’s central bank responded in depth to the criticisms, mentioning the volatility of crypto markets and the use of crypto for cyber crimes as impetus for the video. However, the bank did note that they are not opposed to the development of blockchain technology.

Earlier today, Cointelegraph reported that the Polish Credit Office, the largest credit bureau in Central and Eastern Europe, has partnered with a UK fintech firm to implement blockchain for customer data storage.

Dubai Bitcoin Exchange Halts Fiat Withdrawals Due to Bank ‘Issue’

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Dubai-based exchange BitOasis has suspended UAE Dirham/BTC trading, citing issues with the bank servicing the exchange itself.
A communication was sent to BitOasis users yesterday that starting Tuesday, no more dirham can be withdrawn from the exchange, leaving users with today only to move their balance elsewhere or top it up with more dirham if desired.
Users wishing to make credit card deposits can do so at the discounted fee of four percent until June 16. According to BitOasis, the issuing bank of the exchange is the only problem, and the normal trading of cryptocurrencies such as BTC, BCH, ETH, XRP, LTC, XMR, and ZEC will continue as usual, as will cryptocurrency withdrawals from the exchange into private wallets.

Arabian Business quotes the statement as informing BitOasis users the following:

“If you decide to leave your fiat balances the only way for you to withdraw your funds at any time after May 15th would be to convert it to cryptocurrency and send it to an external wallet”

“If you choose to keep your AED fiat balances after May 15th, currently we do not have any date on when we will be reactivating AED fiat withdrawals, but we are hard at work to provide our customers with this service.”

There is no date as of yet for the reactivation of dirham withdrawals and deposits by wire transfer, although BitOasis have said it should be soon.

The exchange, which operates in the UAE, Saudi Arabia, and Kuwait, has suspended withdrawals in the past as well, halting transfers to and from Emirates NBD, Noor Bank and Mashreq bank accounts in 2017 for a short time Gulf News reported that customers experienced delayed withdrawals while new verifications were also suspended and that the issue was due to regulatory pressure from within the UAE at the time.

Entrepreneur Ola Dudin of Jordan founded BitOasis in 2014 as a hybrid wallet/exchange, and the exchange has been active since then, listing Zcash as recently as April 23, 2018. According to the website, BitOasis plans to be the first digital assets company in MENA to be registered in a major technology center in the region.

The company has not yet updated the blog regarding the new constraints on the use of the dirham currency on the exchange. Many BitOasis users are concerned with the recent developments, and have taken to Twitter to voice complaints and seek answers to their questions on the timeline of the restrictions and whether they still have time to withdraw their money.

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Taiwan: Taipei Bank Launches First Blockchain Payment System In The Country

Privately-held Taipei Fubon Commercial Bank has reportedly become the first bank in Taiwan to deploy a blockchain-based payment system, local media Taipei Times reports May 14.

The bank announced that it deployed its blockchain-based payment system for restaurants and merchants near the National Chengchi University. Taipei Fubon Bank first revealed its plans to introduce a blockchain-based payment network in March 2017 when it signed a contract with the university to carry out “key technology and engineering R&D for [a] blockchain payment network.”

Running on the Ethereum (ETH) network, the blockchain-powered payment application implements the Istanbul Byzantine Fault Tolerant (BFT) consensus protocol, which reduces payment times, as well as saves on the cost of transactions. According to the bank, the algorithm has cut transaction times to less than one second.

The newly-launched blockchain deployment also provides an improved method of recording data transactions. Each transaction is instantly encrypted and recorded on the blockchain, and merchants will be able to query complete transaction records through the blockchain account book.

According to Taipei Fubon Commercial Bank, the transaction volume of cooperative merchants in the zone near the university has quadrupled over the two-week period following the launch. Taipei Fubon Bank states that the next stage in the project’s development is to expand the blockchain-powered payment system to stores and businesses across the Chengchi area, creating a demonstration zone for the new application.

In January, Taipei announced that they intend to turn into a ”smart city,” using blockchain to provide technological advances like pollution sensors and health history tracking to citizens. In February, the governor of Taiwan’s central bank Yang Chin-long stated that the bank is exploring blockchain applications to improve “the security and efficiency of payment systems.”

Bytecoin Price Explodes 82% Following Series of Strange Events

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The Bytecoin price has risen sharply for the day, from $0.012075 on close of trading May 13 to $0.012438 on Monday. However, the coin’s price has seen a series of odd events and swings since Binance announced its listing on May 7.

By May 9, Bytecoin hit an all-time high of $0.0300, a whopping 343 percent 24-hour price spike. As rumored with new Binance listings, cypto enthusiasts saw this as another pump and dump, unsure Bytecoin would maintain the gains for long. Allegations also circled around the coin’s network and withdrawal issues. By May 11, the price dropped to $0.009889, an extreme that even surprised some of the skeptics.

bytecoin priceSingle-day BCN Price Chart

Unphased by the criticism, BCN resumed its rally on Monday, ratcheting up the charts to a present value of $0.012494. This represents a seven-day increase of 82 percent; however, it also represents a 91 percent decrease from the all time high set six days ago.

Around the time of the Binance listing, Bytecoin’s network experience outages. On May 9, its listing on CoinMarketCap also disappeared, even though the coin is in the top 100, at rank 16.

As of this writing, the historical price data for May 9 is missing on CoinMarketCap’s website. The site also has a notice informing visitors that BCN is undergoing maintenance or wallet issues, which the company’s official Twitter account confirms.

bytecoin priceSource: CoinMarketCap

As CCN has reported, the project has seen its fair share of controversy and price pumps. The project prides itself on fully anonymous payments.

As Bytecoin’s website states,

Bytecoin is an open-sourced decentralized cryptocurrency with untraceable payments that was started in 2012. Join us to be a contributor of a worldwide network system that predicts the future.

Founded in 2012, it’s an old hat compared to other coin projects. And more exchanges are getting on board, despite a clearly overloaded network. A May 9 update on the project’s blog states reasons behind the network outages:

“After a closer investigation the source of the problem was determined to be a combination of recent big miners that joined the network with outdated bytecoind versions built more than a year ago and a minor bug in how the block sizes are calculated for consensus. As the hash power of miners who were using the outdated software reached ~25%, the probability of generating a block not accepted by the new bytecoind increased.”

Thankfully the project’s adoption rate of new versions is improving, according to a following update. Users of the coin have shown thanks for the team’s transparency on the network issues and development road map. The outages could just be a growing pain in growing adoption.

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‘Global Blockchain Leader’ At Deloitte Resigns To Join Blockchain-Based Startup

Eric Piscini, former Global Blockchain Leader and Partner at one of the “Big Four” consulting firms, Deloitte, has left the company, Forbes reports May 14. Piscini, who helped build a $50 mln global blockchain practice, is joining the startup Citizens Reserve to move supply chain networks to a blockchain.

The early-stage startup, which is currently raising $300 mln, is a shared database designed to operate on all levels of a supply chain. Within the project, a new digital currency ZERV has been developed using the ERC20 token. The cryptocurrency will reportedly be used by consortium members to access the blockchain, allowing them to implement “nearly instant borderless transactions.”

The platform is based on the public Ethereum blockchain with smart contracts consisting of self-executing code, which could be implemented using various private blockchain solutions. Though the agreements would be limited by a long period of time to close cross-border transactions and foreign exchange rate considerations, with a cryptocurrency transactions can be reportedly conducted in near real time. Piscini said:

“We are building the Ethereum of supply chain… The private blockchain is more for supply chain transactions, and the public blockchain is used for payments. There is a bridge that we created that is kind of our secret sauce.”

ZERV is also considered a utility token as it allows users to exchange goods and services within the platform. The digital currency contains a third component which sets it apart from other ERC20 tokens; it is backed up by assets. The reserve assets are designed to grant the token “a guaranteed value” of $0.01. There will reportedly be 100 bln tokens issued to the value of $1 bln.

According to Forbes, 85% of the funds attracted in the token presale will be used to purchase assets that will back the tokens. 30% of the total funds raised after the round is closed will be distributed to users through a mechanism designed to motivate the creation of the new supply chain services on the platform.

The expected launch of Citizens Reserve falls in July 2018. Piscini declined to reveal the names of potential consortium members, saying that Citizens Reserve is working with three organizations that are currently providing software to the defense industry supply chain in a centralized manner.

Piscini’s decision comes amid a migration of top executives from traditional tech and financial companies to blockchain and crypto. In December, David Marcus left PayPal and Facebook to be appointed to Coinbase board of directors. Brian Armstrong said Marcus’ “knowledge of both the payments and mobile space” was what would help “guide” Coinbase going forward.

Earlier today, the CFO of Australia’s Commonwealth Bank left to join Block.one, the developer of EOS.IS blockchain software, which launched an initial coin offering (ICO) for EOS tokens in June 2017.

Hulu Cautiously Optimistic about Blockchain Solutions to Advertising Challenges

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Video streaming service Hulu is cautiously optimistic about the potential of blockchain technology to solve problems faced by the advertising industry, particularly in the areas of data privacy and brand trust.

Adam Moser, head of ad tech and platform operations at Hulu, told PCMag that the company — which, unlike its major competitors, serves ads to lower-tiered subscribers — said that although the firm is not currently pursuing any blockchain applications, it is excited about the technology’s promise.

“Blockchain is interesting to use because trust, transparency, all of those things matter to marketers. They’re critical from our standpoint not just as Hulu as a brand, but also Hulu as a media publisher. So when we meet with companies that are talking about blockchain solutions, I think the promise of what they can bring to the landscape, specifically regarding transparency and the ability to be able to track transactional details in an open and decentralized way, is something we’re in support of for the industry.”

Moser, who was speaking on the sidelines of the CDX Blockchain Brand Innovation Summit at Columbia University, said that Hulu is taking a “wait-and-see approach” to blockchain applications, noting that smart contracts in particular are still so nascent that the industry has not yet even reached consensus on which challenges this technology can solve.

“Everyone is talking about how blockchain is going to solve for smart contracts, for transparency, for streamlining data targeting…those are three very different avenues. I think this is a potential path forward to solve challenges within our industry, but we have to decide which challenge we want to solve for,” Moser said, noting that applications are not often a one-size-fits-all solution.

“Every time we talk to these companies and they ask if we want to run a test, we take a wait-and-see approach. We want to test-drive the car when it’s been built, not as it’s being built,” he added. “The way we integrate our service onto gaming platforms, smart TVs, etc., it requires a different approach. If a solution comes to us and says it may work on Xbox and Playstation but not on Roku or Apple TV, it doesn’t work for Hulu.”

huluVideo streaming service Hulu is cautiously optimistic about using blockchain technology to improve its advertising service.

That said, the company is hopeful that it can use blockchain technology to standardize the buy side and sell side of the video advertising market, as well as provide advertisers with transparency into pricing and other important data — such as whether their ads are being served to their target demographic.

“Blockchain [shows] a decentralized and open way that marketers can understand how their inventory is being bought and how they’re being charged,” he said.

Ultimately, though, Moser stressed that blockchain is an early-stage technology, so it is unclear when these applications will feature prominently in the advertising industry.

“It feels like we’re in a crawl, walk, run type of approach with blockchain,” he concluded. “If you use that metaphor, right now we’re at the stage where you’re just figuring out how to wiggle your toes.”

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