Crypto weekly update
10. June 2019  • clock 3 min •  Boris Hasko

Dixy has implemented blockchain technology – Crypto weekly update

Every week brings you a recap of the most valuable crypto-news from fields of Technology, Legal & Politics, Business, and Media. So stay tuned and buckle up for some good reading.

Bitcoin has seen a dramatic decline in price over the past few days, which saw the cryptocurrency testing $9,000 before slumping to $7,500. The recent decline in price has been described by traders as simply a required price correction since the climbing from $4,100 in April. While a healthy pullback is nothing to worry about, Bitcoin still maintains a massive gain in price in 2019. Bitcoin has climbed over 120% in 2019, meaning a 10% decline in price that was seen on Monday drops the total price gain in 2019 to 110%, which is still quite impressive.

I. Technology

Russia’s third-largest food retail firm, Dixy, has implemented blockchain technology in its corporate finance system, according to a press release shared with Cointelegraph on June 5. The Moscow-based retailer has deployed blockchain in cooperation between suppliers and factoring firms, which represent third parties that purchase businesses’ invoices at a discount in order to help those businesses to raise funds. Specifically, following a successful pilot test, Dixy is now moving the interactions between suppliers and factoring companies to an Ethereum (ETH) blockchain-powered open trade finance platform called Factorin. The Factorin platform provides suppliers with a factoring management tool that can be operated via a web interface or a mobile application, automating processes and enabling suppliers to receive funding within one day after a delivery is completed, the press release notes. The platform sufficiently facilitates verification processes, as well as minimizes manual labor and associated risks, the company said in the press release. Dixy added that the retailer is now moving all its factoring-dealing suppliers to the Factorin platform. Those suppliers will be able to receive funds through financing by local banks such as Russia’s largest private bank Alfa-Bank, Pervouralskbank, and Bank National Factoring Co, as well as factoring-specializing firm GPB-Factoring.

II. Legal & Politics

The Republic of the Marshall Islands (RMI) has formed a non-profit organization to support the government in the implementation of the country’s national digital currency. The development was announced in a press release on June 4. The RMI has established the SOV Development Fund to support the government’s plan in the development and implementation of the country’s national digital currency, the Sovereign (SOV). The fund will be fully independent, with a board of seven directors, of whom two will be appointed by the government, and two nominated by SFB Technologies — the firm which is developing the SOV’s blockchain infrastructure. The remaining three directors will be chosen unanimously by the aforementioned four from among international experts in blockchain technology, banking and monetary policy. In a video presentation to the Blockchain for Impact Summit at the United Nations Headquarters in New York, the Minister In Assistance to the President, David Paul, said, “We are designing SOV in a way that will not place any burden on the government’s finances. The currency funds itself.” Peter Dittus, Chief Economist for SOV, explained that the SOV Development Fund’s mandate is to seed the ecosystem around the SOV and to smooth the volatility of the SOV by selling and buying SOV against the United States dollar, among other targets. As Dittus previously told Cointelegraph, the decision to develop a national digital currency is backed by several reasons. According to Dittus, developing countries, such as the RMI, struggle with the high costs of remittances, and having a digital legal tender creates a situation where the solution to costly remittance is “baked into” the monetary system itself. The implementation of the RMI’s national cryptocurrency had faced criticism from the International Monetary Fund last September, when the agency warned the country about the risks of adopting a cryptocurrency as a second legal tender, urging the country to abandon the project. In March, Israeli startup Neema — which also participates in the development of the SOV — stated that the project still needs work in order to placate U.S. financial regulators. Specifically, the company mentioned that every SOV account will be fully identified and buyers will be checked against the U.S. Office of Foreign Asset Control.

Egypt welcomes cryptocurrency as they declare Bitcoin as “halal” under Sharia laws. The new regulation revokes the ban to crypto, which has been enforced since 2018. Another milestone for cryptocurrency and the supporters, especially in the middle east region as a new update has emerged from Egypt. The country that previously barred all form of digital assets now declares Bitcoin as “halal”, which means it’s permissible under Sharia Law. The report wrote,” The new draft law has allocated great importance to financial technology, keeping pace with major developments in the banking industry in the world and enhancing the use of modern technology in the provision of financial and banking services… The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders, provided the Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions.” The new regulation will allow crypto exchanges and businesses to operate in the country, although they’re required to apply for licenses prior to the operation, as reported by Live Bitcoin News. The fears of volatility have lessened as Bitcoin has been showing a “strong performance” never seen before lately. To recap, the Egyptian government has been enforcing the ban to cryptocurrency since 2018, primarily due to lack of trust with digital assets. Their highly volatile nature is said to be the main reason, as well as the negative stigma that they’re heavily related to money laundering and other related criminal activities. One step at a time. One country at a time.

III. Media

Crypto Beats Fiat in Round the World Payments Race. Four contestants are currently racing their way around the globe in a quest to reach Amsterdam first. The Payments Race runs westwards from London, circling the globe before finishing at the Money 2020 event in the Dutch capital today, June 4. In keeping with its theme, each contestant must use a different payment method throughout their journey. Alex Hobern has selected cryptocurrency as his sole means of sustenance and survival on the winner-takes-all journey. Cash, card, mobile, and crypto are the four payment methods available for the Round the World Payments Race, with one assigned to each racer. Northern Ireland, Hong Kong, and Lithuania are among the checkpoints to be visited during the course of the westward circumnavigation. Crypto candidate Alex Hobern is accustomed to drumming up publicity in his role as a social media creator and TV personality, but he’s a confessed newb when it comes to cryptocurrency. As such, his journey is one of self-discovery as much as it is global conquest. The rules of the challenging mandate that he can’t use crypto surrogates such as cryptocurrency debit cards or BATMs: Hobern is only permitted to spend crypto in its purest P2P form. When asked by why he had selected cryptocurrency from the available options, Hobern explained: “In my view, it poses the biggest challenge. With a large and dedicated community, its adoption by merchants is extremely low. Being someone who thrives out of their comfort zone, I decided it was the best way to make the trip an actual challenge.” He confesses to having known “absolutely nothing” about cryptocurrency prior to the race save for a few tales from mates who got rich during the market mania of 2017. To help him out, London-based cryptocurrency payment service Wirex gave him a crash course on everything he should know before setting out. Cryptocurrency’s suitability for spending is a matter that’s fiercely divided its community. While a significant proportion of BTC users have no desire to spend their coins, which they believe to be a store of value, others are eager to deploy their crypto as P2P cash including BCH, LTC, and DASH owners. Alex Hobern speaks glowingly of the support he’s received from the crypto community on his journey, but admits to having experienced difficulty in finding businesses that would accept cryptocurrency. He even visited a place called the Crypto Cafe that wouldn’t accept his digital coins. Prior to arriving in Europe, Alex’s team were firmly in the lead, based on points scored for completing various payment challenges along the way. However, he found it difficult to complete the ‘Different modes of transport’ challenge in Europe using crypto, where he instead resorted to ticking off as many countries as possible to gain additional points. Despite the difficulties of spending cryptocurrency in certain places, in every country Hobern has visited, there were people willing to welcome him and his crypto with open arms. Trip highlights have included yachting in San Francisco bay, with the aid of Cheung Tan from Token, who purchased tickets, enabling Hobern to pay him in BTC. Future.Travel and Trippki were used to arrange flights and hotels, all paid for in crypto, leaving Hobern with the task of meeting crypto enthusiasts on the ground to help him get around. During the course of his trip, which finishes today, Hobern has managed to spend cryptocurrency in the U.K., Ireland, Canada, U.S., Hong Kong, Dubai, Austria, Slovakia, Hungary, Italy, Lithuania, Finland, Belgium and Amsterdam, primarily in BTC, ETH, and LTC. The difficulties of using bitcoin core for small payments became evident on at least one occasion, when Hobern found that the cost of the transaction fee exceeded the cost of the goods. Team Crypto was first to cross the finish line a few hours ago, but will need to wait to find out whether they accrued more points than the other teams. Win or lose the Round the World Payments Race, Alex Hobern claims to have developed a love for all things crypto, and a desire to get into investing and trading when his epic journey wraps up in Amsterdam later today.

It has just been reported by CNBC that social networking giant Facebook will be officially announcing the creation of its own crypto, to be known as GlobalCoin, later this very month. Chepicap has previously discussed the upcoming Facebook cryptocurrency and what it may look like, but it sounds like we’ll be finding out even more pretty soon. Though no date is given, a new report has announced that Facebook will make a public reveal of the coin before the month of June is out. It was also revealed that the company will allow for employees to be paid in the new currency, though it isn’t clear what avenues will be available for exchanging the coin, or what services will accept it. That being said, it is safe to assume that, if nothing else, some of the major exchanges will support it. Facebook has also revealed that it plans to rollout ATM like machines for the purchase, and presumably sale, of this coin. One further intriguing tidbit about GlobalCoin is that apparently, Facebook is reaching out to third-party companies to run the “nodes” of this network. For reasons that are hard to fathom the company is apparently planning to charge $10 million for the “privelege” of running one of their nodes. Meanwhile, a Bitcoin node can be run by anyone for basically just the cost of hardware and electricity. It is at this time unclear what kind of reception Facebook can hope to get with this endeavor. On the one hand, the pre-existing crypto community will likely upfront reject this new coin for the obvious reasons of centralization and privacy. On the other hand, only a sliver of Facebook’s 2 billion users probably overlaps with anyone who considers themselves “serious” about crypto.

Japanese e-commerce giant Rakuten has partnered with Japan’s biggest railway firm, the East Japan Railway Company (JR East), to promote cashless payments. The news was reported by Cointelegraph Japan on June 5. The partnership will enable commuters to charge and use their rechargeable smart fare card — JR East’s “Suica” — via the Rakuten Pay mobile app. As Cointelegraph Japan notes, the integrated service will bring cashless transport payments via the mobile app to commuters at 5,000 train stations and approximately 50,000 buses, in addition to around 600,000 stores across Japan. According to an official press release published today, the forthcoming service is planned for launch in spring 2020. The two firms will reportedly look to future joint ventures to further promote cashless payments networks, the press release claims. As Cointelegraph has previously reported, an update to the popular Rakuten payments app that could potentially facilitate support for cryptocurrency payments was revealed in the company’s 2018 earnings release, published this February. Rakuten had acquired domestic crypto exchange Everybody’s Bitcoin in August 2018 in a $2.4 million deal. This January, Rakuten announced a revision to its corporate restructure, setting up a new payments subsidiary that includes its new cryptocurrency business. Rakuten now plans to launch a forthcoming crypto exchange — dubbed Rakuten Wallet — this June, having sealed regulatory approval from Japan’s Financial Services Agency (FSA) in March. Also in March, the FSA greenlighted Japanese crypto exchange DeCurret, which in parallel unveiled a new crypto payment system that will enable JR East’s Suica payment card to be topped up with cryptocurrency. Notably, at the time of DeCurret’s revelations in late March, no concrete plans to roll out the crypto-chargeable Suica card had been finalized, with JR East reportedly only considering the implementation.

United States insurance giant State Farm and military-affiliated bank United Services Automobile Association (USAA) are testing a blockchain-based subrogation solution with real claims data. State Farm announced the development in an official press release on May 30. The two insurance titans are using blockchain technology to automate and streamline the subrogation process in insurance claims. The platform purportedly allows them to automatically compile total payments, net the balance, and conduct a regularly scheduled payment between insurers. State Farm states that the blockchain solution is being tested with real claims data. State Farm explains that subrogation occurs when two insurance companies agree on some amount of financial compensation that will be awarded to the claimant’s representative by the at-fault individual’s representative. This is usually the final phase of the claim process, it notes. State Farm Innovation Executive Mike Fields commented on the large scale of subrogation claims, and alluded to why streamlining the process would be desirable: “In 2018 alone, the total amount of dollars demanded and issued through the subrogation process was over $9.6 Billion for all insurance carriers. You can imagine the time and resources required to complete these transactions.” According to the company’s website in December, the insurance agency processes 38,300 claims daily and holds approximately 519,000 accounts in mutual funds. As previously reported by Cointelegraph, State Farm announced that it was working on the subrogation project at the end of 2018. Per today’s announcement, State Farm and USAA have been jointly working on the project since early 2018.

IV. Business

Utility Settlement Coin (USC) project — led by some of the world’s largest banks — has announced the creation of a new firm and closure of an accompanying £50 million ($63.2 million) Series A financing round. The news was revealed in a press release shared with Cointelegraph on June 3. As Cointelegraph has previously reported, the USC platform aims to facilitate the issuance of blockchain-based currencies in the commercial and central banking sector worldwide. According to today’s press release, USC project partners have now become the founding shareholders in a new firm representing the project’s commercial realization — dubbed Fnality International. They include some of the world’s major banking players: Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, ING, KBC Group, Lloyds Banking Group, MUFG Bank, Nasdaq, Sumitomo Mitsui Banking Corporation, State Street Corporation and UBS. During the four years of its development so far, the USC R&D project has reportedly focused on developing efficient solutions for global cross border payments in the future context of tokenized wholesale markets. The project also aims to find ways to reduce settlement, counterparty and — ultimately — systemic risk in post-trade settlement processes. The press release outlines that USC aspires to be a token that is 100% backed and guaranteed at all times by a given central bank’s national fiat currency. For each jurisdiction, Fnality’s solution will reportedly ensure that settlement is achieved in compliance with local settlement finality laws and regulations. The R&D work has led to the creation and forthcoming deployment of a new solution that addresses legal, regulatory, operational and technical issues, and will establish a regulated network of distributed Financial Market Infrastructures (dFMIs) that support the international exchange of value transactions. Initially, five national fiat currencies are to be supported — CAD, EUR, GBP, JPY and USD — with further currencies reportedly to be added in the future. The USC project further aims to innovate clearing and settlement processes, facilitate Delivery vs. Payment in tokenized securities markets, and enable instant settlement on a Payment vs. Payment basis within the secured funding market, the press release adds. In an interview with the Wall Street Journal published today, Fnality CEO Rhomaios Ram said he expects the USC token will be fully operational within 12 months, once regulatory approval has been secured. As reported, the United States’ largest bank JPMorgan Chase (JPM) has this year unveiled its own blockchain-powered settlement-focused stablecoin, dubbed JPMCoin.

French retail giant Carrefour has seen an increase in sales after the implementation of a blockchain-based tracking system, Reuters reported on June 3. Carrefour’s blockchain tracking system enables customers to track the supply chain of 20 items, including meat, milk, and fruit from farms to stores, thus avoiding products with genetically modified organisms, antibiotics, and pesticides. This year, the company reportedly plans to add 100 more products, including non-food lines, to the system. Emmanuel Delerm, Carrefour’s blockchain project manager, told Reuters that “the pomelo sold faster than the year before due to blockchain. We had a positive impact on the chicken versus the non-blockchain chicken.” The company also revealed that the tracking system was most widely used in China, followed by Italy and France. “Millennials are buying less but buying better products for their health, for the planet,” Delerm said. Carrefour initially began working on the tracking system in collaboration with IBM by joining IBM’s blockchain-based food tracking network dubbed Food Trust last year along with other supermarket chains and retail companies like Nestle SA, Dole Food Co., McCormick and Co., McLane Co., Tyson Foods Inc., and Unilever NV, among others. In mid-April, Carrefour and Switzerland-based food giant Nestlé partnered with IBM to use the latter’s blockchain technology to track the supply chain of Mousline, a well-known brand of instant mashed potatoes. The system lets consumers check the varieties of potato used, the dates and places of manufacture, information on quality control, and places and dates of storage. Recently, Big Four audit firm EY revealed that it is now providing its proprietary blockchain solution for a major new platform that helps consumers across Asia determine the quality, provenance, and authenticity of imported European wines.

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