Fumbi - Weekly crypto news (22.)
Published: 29. 05. 2019 ·
Every week Fumbi.network 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.
Monday, May 27 — following a mild correction yesterday, the crypto markets have seen strong positive momentum today, with bitcoin (BTC) soaring to its highest price point in over a year. Virtually all of the top 50 cryptocurrencies are seeing solid green, as Coin360 data shows. Bitcoin has reported over 9% in growth on the day and is trading at $8,727 by press time. Having briefly dipped below $8,000 yesterday, May 26, the top coin saw a sharp rally kick in towards the evening. Bitcoin has seen considerable volatility this week, posting an intra-week low of around $7,550 on May 23 before surging to today’s new price peak. Bitcoin last traded in the $8,700-800 range over a year ago, in the second week of May 2018. On the week, Bitcoin has sealed a bullish 10.5% gain. cointelegraph.com/news
Chinese e-commerce giant Alibaba will integrate blockchain technology into its intellectual property system of global enterprises and brands, local news outlet Sohu reported on May 23. Ali Xizhi, the company’s director of intellectual property protection, reportedly said that Alibaba is in the process of upgrading the filing of intellectual property rights by utilizing blockchain. Alibaba is planning to fully implement the technology in September, after which it will be expanded to digital copyright protection, including visual content. The system will purportedly allow electronic deposits from international brands to directly link to the Internet Court through the blockchain-based Ali Intellectual Property Protection Platform ("IPP Platform"), providing a basis for litigation rights protection. China has reportedly set up three Internet courts in Hangzhou, Beijing and Guangzhou to manage internet-related cases and allow plaintiffs to file their complaints online. In March, Alibaba and Aerospace Information Co., a major software developer and provider, agreed to take advantage of their respective brand technologies “to actively integrate resources and carry out in-depth cooperation” in the fields of cloud computing services, finance and taxation, government affairs and blockchain technology, among others. Also in March, vice president of Alibaba Group Liu Song revealed the company’s plans to implement blockchain technology for cross-border supply chains, with the possibility to link with local governments. Earlier this week, a report by Securities Daily News revealed that Alibaba had applied for 262 blockchain patents. cointelegraph.com/news
Major automobile manufacturers Honda and General Motors (GM) are jointly conducting research on electric vehicle and smart grid interoperability using blockchain tech, Japanese news outlet Nikkei reported on May 20. As part of the project, Honda and GM will investigate whether electric vehicles can be used to stabilize the supply of energy in smart grids. Specifically, the companies intend to develop data retrieval methods between electric vehicles and smart grids, which will purportedly enable electric vehicles owners to earn fees from storing power in car batteries and exchanging it with the grid. The parties will work within the international technology consortium Mobility Open Blockchain Initiative (MOBI), that aims to make mobility services more efficient. The platform was launched in early May and is the brainchild of over thirty participants including Bosch, Hyperledger, IBM and IOTA. As previously reported by Cointelegraph, GM filed a blockchain patent for a solution to manage data from autonomous vehicles. The system aims to provide “secure” and “robust” data distribution and interoperable exchange between multiple automated vehicles and other entities, such as municipalities, regional authorities, and public facilities. The American automotive giant also became the joined blockchain startup Spring Labs’ partner project to enhance data security. Among other leading car manufacturers that are embracing blockchain technology, Mercedes-Benz developed a blockchain platform that allows for the storage of documentation and contracts in complex supply chains. cointelegraph.com/news
II. Legal & Politics
Internal Revenue Service (IRS) commissioner Charles Rettig has explained to U.S. representatives that the tax department plans to issue clearer guidance toward cryptocurrency taxation soon. Since 2014, Americans have been asking the tax agency for better clarification in regard to official tax guidelines. In September 2018, news.Bitcoin.com reported on a group of U.S. bureaucrats who sent a formal letter to the IRS asking for more clarification in regard to the way cryptocurrencies are taxed in America. U.S. representative Kevin Brady, Tom Emmer and a variety of other state officials insisted in the letter that digital asset taxation needs clearer guidelines. Since the tax agency’s official statement in 2014, the current guidance for taxpayers is to file each and every transaction executed when using a cryptocurrency as each transaction is considered a taxable event. Meanwhile, in the U.S., cryptocurrencies are also taxed under traditional capital gains laws that apply to property investments. The letter from various representatives notes that most officials believe the IRS should have no problem issuing a comprehensive virtual currency strategy for taxes. “[We] strongly urge the IRS to issue updated guidance, providing additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies.” the letter read. IRS commissioner Charles Rettig responded with an official statement which explains that the tax commissioner agrees with the request and the agency plans to issue tax guidelines soon. “I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance,” Rettig wrote in response to the request from congressional leaders. Rettig’s letter details that the IRS issued Notice 2014-21, which essentially says that cryptocurrencies like bitcoin are to be treated as property. This means that existing tax statutes that apply to property transactions also pertain to virtual currencies. However, Rettig’s response notes that things have changed since then and virtual currency use as a medium of exchange and as an investment vehicle have continued to develop. The IRS commissioner details that the tax agency has received “numerous comments in response to the notice (2014-21)” and the IRS claims to be working with “internal and external stakeholders.” The stakeholders and the IRS have been identifying areas that need guidance. According to the IRS, there are three identified areas underscored by Rettig’s letter and the new guidelines should include:
- Acceptable methods for calculating cost basis.
- Acceptable methods of cost basis assignment.
- Tax treatment of forks.
“We have been considering these issues and intend to publish guidance addressing these and other issues soon,” Rettig wrote. Following the letter, congressman Tom Emmer (MN-06), a member of the Congressional Blockchain Caucus and coauthor of the initial letter, replied back to the IRS commissioner. “I am glad to hear of the IRS’ plans to issue guidance on this important issue — Taxpayers deserve clarity on several basic questions regarding federal taxation of these emerging exchanges of value,” Emmer’s correspondence said. “I look forward to seeing their forthcoming proposal, and working together to serve the American taxpayers.” The original bi-partisan letter from U.S. representatives expressed hope for more guidance from the IRS with a deadline for May 15, 2019. People have been complaining about the lack of well-defined tax guidelines for quite some time as many Americans believe the process is confusing. Further, the IRS has had no issues with the enforcement aspect of making people pay up and the agency has regularly sought to remind taxpayers of the penalties for non-compliance. The tax entity has also applied criminal prosecution to U.S. residents who have failed to ‘properly’ report their income tax in regard to virtual currency transactions. news.bitcoin.com
An Israeli judge has ruled that bitcoin (BTC) is an asset and not a currency, local news site Globes reported on May 21. The judgment is significant because it means profits made by selling the cryptocurrency will now be liable to capital gains tax, Globes notes. Noam Copel, who founded the blockchain startup DAV, had bought BTC in 2011 and sold two years later — making a profit of $2.9 million at today’s rates. During the court case, he had argued that bitcoin should be regarded as a foreign currency, as fluctuations in exchange rates are not taxed. But the Israel Tax Authority (ITA) argued differently, with the organization putting forward the idea that currencies must have some physical manifestation under the country’s laws. Judge Shmuel Bornstein ruled that Copel had failed to prove that bitcoin met this requirement, or that it could be used as a viable alternative to fiat when he had sold the cryptocurrency six years ago. However, he indicated that the court’s attitude may change — describing his ruling as “for now.” As things stand, the entrepreneur must now pay tax on $830,000 of the profits he made; however, Copel does have the option of appealing to Israel’s Supreme Court. The ITA had first outlined plans to tax cryptocurrencies as property in February 2018. Earlier this month, the United States Internal Revenue Service said it was prioritizing issuing guidance on cryptocurrencies after politicians in Congress warned there is still much ambiguity about how the asset should be taxed. cointelegraph.com/news
By CCN: According to Business Korea, a mainstream media outlet in South Korea, Samsung Electronics is preparing the integration of crypto assets into Samsung Pay. Samsung Pay reportedly accounts for around 80 percent of the market share of the simple payment market and the integration of crypto assets is expected to increase the mainstream adoption of the asset class. “Samsung Electronics appears to be moving to integrate cryptocurrencies to Samsung Pay, which accounts for 80 percent of the South Korean simple payment market. The company has recently transferred the blockchain task force (TF) of the mobile business division to the service business division,” the report from Business Korea read. In November 2018, The Korea Herald reported that Samsung Pay recorded a 58 percent increase in its user base year-over-year. WiseApp, an industry tracker, found that Samsung Pay was the most widely utilized financial application in late 2018 with 10.4 million users. In 2017, the platform had about 6.6 million users. 10 million users represent about 20 percent of the entire population of South Korea and the platform also has many users overseas that utilize the application for its technology called magnetic secure transmission (MST), which enables users to transact at conventional point of sale (PoS) terminals by merely hovering over them. The acquisition of LoopPay at a valuation of $250 million allowed Samsung Pay to equip the newly developed technology and obtain an edge over Android Pay and Apple Pay. The next strategy of Samsung Pay to secure a niche market to expand its existing user base seems to be the integration of crypto assets based on local reports. Samsung already integrated a crypto asset wallet called Samsung Blockchain Wallet in February into its flagship Galaxy S10 device, allowing users to hold, send, and receive cryptocurrencies securely from the device’s built-in wallet. In March, Donga, another mainstream media outlet in South Korea, reported that Samsung Pay is likely to integrate crypto next following the lead of Samsung Electronics. The monthly report of Donga translated by CCN read: Samsung Pay has recently extended the transaction period for overseas users and integrated an international payment processing service, aggressively targeting the global financial services market. At this phase of development, if a cryptocurrency wallet is added to Samsung Pay, the application will be strengthened as a complete fintech platform. Currently, the Samsung Blockchain Wallet is said to be supporting Ethereum but more cryptocurrencies are expected to be integrated in the near-term. Under the leadership of Kim Yong-jae, the vice president of the service business division, Samsung’s blockchain task force has led various initiatives including the recent introduction of the Samsung Blockchain Wallet to increase the accessibility of cryptocurrencies. With reports suggesting that Samsung is already exploring the possibility of launching a blockchain network with its own token on the Ethereum blockchain protocol, the electronics giant is expected to continue moving forward with its plans to target the rapidly growing sector. A source told CoindeskKorea, a crypto publication operated by mainstream media outlet Hankyoreh, reported last month: Blockchain task force made several models and are evaluating [them]. There are already several platforms that are functioning after some internal tests. Reports surrounding the potential integration of crypto assets by Samsung Pay follows the integration of cryptocurrencies as a payment method by large corporations such as AT&T, which would make cryptocurrencies easier to spend for casual users. For years, merchant adoption has been a key area of crypto that has lacked adoption and progress. The proactive approach of firms like AT&T and Samsung is expected to raise the growth rate of merchant adoption in the long-term. www.ccn.com
United States telecom and media giant AT&T now accepting cryptocurrency for paying phone bills online, according to an official press release on May 23. AT&T will process bills paid in cryptocurrency using crypto payments platform BitPay. BitPay is a platform that converts cryptocurrencies to fiat and is used by over 20,000 businesses. AT&T is reportedly the first United States-based business in the wireless network industry to offer bill payments with BitPay. Kevin McDorman, vice president of AT&T Communications Finance Business Operations, said, “We have customers who use cryptocurrency, and we are happy we can offer them a way to pay their bills with the method they prefer.” Near the end of 2018, AT&T announced that it was working on a suite of blockchain solutions compatible with Microsoft Azure and the IBM Blockchain Platform. The stated aim of the suite is to provide “additional transparency and accountability to even the most complex supply chains” for institutional customers in fields such as manufacturing, retail, and healthcare. AT&T also filed a patent application — which was published by the U.S. Patent and Trademark Office (USPTO) in December — for a blockchain-based “social media history map” that would allow a network such as AT&T to gather its subscribers' social media “transaction” data. As per the application: “The social media history map platforms described herein may take advantage of the immutable and permanent nature of blockchain records to store, and provide access to, data representing online transactions that occur on multiple social media applications.” cointelegraph.com/news
Russia is reportedly considering the implementation of a gold-backed cryptocurrency, according to Russian news outlet Tass. Immutability and censorship-resistance are useful for governments in certain instances, such as conducting international trade in the face of sanctions. Russia and Iran previously considered using cryptocurrencies for business between the two. Iran later launched a gold-backed cryptocurrency. Central banker Elvira Nabiullina was cold to the idea of government-backed crypto, saying that a settlement mechanism created in “national currencies” would be preferable. “We are generally opposed to cryptocurrencies being launched into our monetary system. We do not see the possibility that cryptocurrencies could act as monetary surrogates. Definitely not in this part.” Russia has been all over the place on the subject of cryptos. The signals from Moscow are confusing. A Russian economist was able to fool a number of western outlets into believing that the country was going to procure at least $10 billion in cryptocurrency with a series of false tweets. Russia has considered bans on cryptocurrency, which the central bank seems to favor, and is also working on a regulatory framework that precludes normal people from acquiring and trading cryptos. Russia’s digital regulations are also in a state of flux, with a “digital iron curtain” – not unlike the Chinese “great firewall” – that would enable the country to essentially turn off the internet. Last February, Vladimir Putin ordered work on a “CryptoRuble” which would help the country’s financial services subvert Western sanctions. Russia is part of the Eurasian Economic Union, a smaller version of the European Union, whose member states include Armenia and former Soviet-bloc countries. EAEU Minister of Integration and Macroeconomics Tatyana Valovaya was more positive on the notion of using crypto to settle payments, at least between the member states. She said: “We have prepared an analytical report and will present it soon, that will analyze what cryptocurrencies are, what is happening in the world, what approaches countries have, what regulation is provided. […] If the trend of cryptocurrencies and blockchain development is picking up pace, we have to realize that.” At this point in the game, nearly every country has realized the potential of bitcoin and blockchain and has developed some plan to take advantage of or regulate them. Iran uses its gold-backed cryptocurrency for international settlements. Several Middle Eastern nations also use decentralized ledgers to transact with each other. Meanwhile, the petro, of course, was a spectacular failure, just like the rest of the Venezuelan economy over the past several years. Highly developed economies like Sweden are working on national digital currencies as well. www.ccn.com
China updated its cryptocurrency rankings on May 23 — with eos retaining the top spot and bitcoin moving up three places. The government-sponsored index assessed each blockchain on three criteria: technology, application and innovation. Joining EOS in the top five was tron, ether, steem and ontology. Despite its dominance in the crypto industry overall, Bitcoin was in 12th place. While it scored well for creativity, it placed behind EOS in the score for basic technology. The rankings were released by the Center for Information and Industry Development in collaboration with China’s Ministry for Industry and Information Technology. This is the 12th assessment to take place, and updates are now being made once every two months instead of monthly, the notice reads. Eos has held the top spot since June 2018, while tron has managed to stay in second place since February 2019. Chinese businesses have been exploring blockchain with interest, Cointelegraph has reported. Last week, e-commerce giant Alibaba unveiled plans to integrate the technology into its intellectual property systems. Meanwhile, China’s e-commerce site JD.com has applied for more than 200 blockchain patents. cointelegraph.com/news
Spanish Banking Fintech Launches Visa-Friendly EU Crypto Debit Card. 2gether, based in the EU, announced today that it’s launching a Visa debit card which will enable users to convert crypto to fiat via ATM quickly. The card itself doesn’t charge a fee to make these transactions, but there is a fee involved in exchanging the crypto and whatever fees the ATM itself may charge. The card is issued by a registered money transmitter based in Spain. Once, crypto users dreamed of a day when Bitcoin/Crypto ATMs would be so prevalent that they could go to any shopping establishment and quickly get some cash from their crypto wallets. While Bitcoin ATMs are growing, particularly 2-way ATMs that enable one to buy and sell crypto, the dream is far from a reality. Some states in the US, for example, only have a handful of Bitcoin ATMs. The machines are primarily concentrated in major cities, and for their operators, they can occasionally present a risk. In a press release, 2gether paints a scenario where their card will make the most sense. “Imagine you’re exploring the mystical markets of Marrakech, and you suddenly realize that you left all of your cash back at the hotel. However, you just so happen to have €500 worth of Bitcoin, but what good will that do you as the spice merchant stares at you in a state of confusion. How are you going to bring home those spices, teas, and that ornate rug that would look perfect in your living room? 2gether’s prepaid Visa card solves this problem by offering users the ability to directly convert their crypto holdings to withdraw cold hard cash from any Visa-friendly ATM. With 2gether, you also won’t be stranded at the market as you can now hail a cab back to the hotel and pay the driver in cash.” The offering will be far from the only way that people can access crypto via traditional debit/credit networks. John McAfee is reportedly working on a crypto debit card. Coinbase CEO Brian Armstrong has said that his company’s offering will eventually come to the United States. Both Bitpay and Coinbase have previously offered crypto debit cards. Companies like Mastercard and Visa have gradually warmed to the idea of Bitcoin and blockchain, after initially decrying their lack of validity because governments don’t “back” them. Mastercard, in particular, had a rocky start with crypto, but today it is one of many traditional finance giants to secure a number of patents based on blockchain. 2gether is more than just a crypto debit card company. They also have a mobile app for “collaborative banking.” As a side note, they’re running an ICO for 2GT tokens. The token will reward holders as the platform grows, as their FAQ states: “2gether’s collaborative model is built around its native token, the 2GT, which acts as its own unique unit on the app for user contributions, store of value intrinsically linked to the platform’s transactional growth and medium of exchange for 2gether’s stakeholders within our ecosystem.” Crypto holders in the future will have a variety of options. 2gether joins a growing, crowded space whose overall growth is subject to the ebbs and flows of the broader crypto market. www.ccn.com
Turkey’s Collapsing Currency Will Drive Investors to Bitcoin, Says Max Keiser. Bitcoin bull Max Keiser has hinted that as Turkey’s economy worsens, Turks could turn to Bitcoin as a hedge. In a tweet, Keiser said that Bitcoin ‘will become a factor for Turks as hard money becomes hard to come by’. The broadcaster who hosts the Keiser Report show on RT is on point in making this prediction. Already, the Turkish Lira is the 5th most traded national currency for Bitcoin. In this regard, the lira is only eclipsed by the U.S. dollar, the yen, the won and the euro. It is ahead of the Canadian dollar and the British pound. This comes at a time when Turkey’s central bank has loosened monetary policy sparking fears of increased inflation. On Tuesday, the Turkish financial regulator reduced repo auction rates by 150 basis points. Additionally, the Turkish economy is expected to take a hit following a prolonged electioneering period. After holding local elections more than a month ago the ruling party AKP lost in key cities. Consequently, President Recep Tayyip Erdogan’s party earlier this month called for a rerun in Istanbul citing ‘irregularities and corruption’. The political uncertainty is expected to worsen the economic situation in the country. For more than a year Turkey’s inflation rate has been in the double digits. Last year in October, Turkey’s inflation rate reached a high of 25.24 percent. Last month it was at 19.50 percent, the lowest level since August 2018, according to Trading Economics. Other economic indicators are equally worse. At the beginning of the year, the unemployment rate in Turkey reached a decade high of 14.7 percent. With the economic situation expected to worsen, the figure is only expected to rise. Credit rating agency Moody’s has projected that the Turkish economy will contract by 2 percent this year. This will be a continuation of a trend that has been ongoing. As a result of the high inflation levels, Turks have been turning to hard currencies. According to CNBC, Turks are increasingly abandoning the lira in doing business and turning to euros and dollars. In March it was reported that the level of dollar accumulation by Turkish businesses and households had hit the highest level since 2012. Days before the March local election, hard currency worth $4 billion was acquired. Currently, it is estimated that dollar deposits in Turkey account for nearly 50 percent of all deposits. This is the highest level since 2006. Against the U.S. dollar, the lira has depreciated by 32 percent this year. www.ccn.com