Visa has launched a cross-border payment - Crypto weekly update
Every week Fumbi.network brings you a recap of the most valuable crypto-news from the fields of Technology, Legal & Politics, Business, and Media. So stay tuned and buckle up for some good reading.
Bitcoin (BTC) is lacking a clear directional bias for the eighth consecutive day amid a continued rally in litecoin’s (LTC) price. The price of a single bitcoin – the world’s leading cryptocurrency market value – has been restricted to a $600 range since June 5. While any drops to $7,500 have been consistently short-lived, buyers have also repeatedly failed to engineer a convincing break above $8,100. As of writing, BTC is changing hands at $8,000 on Bitstamp, representing a 0.5-percent gain on a 24-hour basis. With BTC so indecisive, major alternative cryptocurrencies like ethereum’s ether token, XRP, bitcoin cash and EOS are also struggling for clear direction. Litecoin, however, is flashing 6.5 percent gains on a 24-hour basis, according to CoinMarketCap. The fourth largest cryptocurrency by market capitalization rose to $141 on Bitstamp earlier today, the highest level since May 2018. coindesk.com
Online retail giant Amazon has partnered with United Kingdom-based insurance agency Legal & General to create a blockchain system for managing corporate pension deals, according to a report by Reuters on June 11. Legal & General will reportedly make use of the Amazon Managed Blockchain for its bulk annuity transactions, which happen when companies transfer their pension schemes to Legal & General for insurance. According to an article by the Financial Times, companies make bulk annuity transactions to insurers like this so that they are not ultimately responsible for personally paying their employees’ pensions. CEO of Legal & General Reinsurance Thomas Olunloyo commented on how a blockchain solution is fitting given the longevity of annuities: “… it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years.” As previously reported by Cointelegraph, Amazon released its managed blockchain service in April through its subsidiary Amazon Web Services. This blockchain-as-a-service (BaaS) allows users to more easily create and maintain blockchains on the Ethereum and Hyperledger networks by automating certain aspects of blockchain management. According to Rahul Pathak, the general manager of Amazon Managed Blockchain, the service “… takes care of provisioning nodes, setting up the network, managing certificates and security, and scaling the network.” cointelegraph.com/news
IBM is expanding its partnership work with Azerbaijan’s government to bring blockchain technology to customs procedures, Central Asian-focused Trend News Agency reported on June 12. Following a reported deal with the country’s central bank in October 2018 — which should see blockchain deployed in various areas over a five-year period — IBM will now use the technology to target cargo transportation. The news came from Azerbaijan’s State Customs Committee, the chairman of which, Safar Mehdiyev, spoke about the plans at a press conference during the ongoing IT/TI Conference and Exhibition of the World Customs Organization. “It will be possible to obtain the necessary information from the database online, without outside interference,” he explained. Mehdiyev added: “It will be useful for both entrepreneurs and customs authorities, as it will improve the quality of customs services provided.” Blockchain’s potential in customs procedures has long been a source of interest for governments worldwide, including the United States, which last August launched a pilot scheme with the tech of its own. Baku, meanwhile, wants to further use the new tool beyond its borders, with Mehdiyev adding there were plans involving nearby Moldova and Ukraine, along with neighboring Georgia. “In this direction, we are implementing a project with Ukraine with the support of Georgia and Moldova,” Trend quoted him as adding. Another Azeribaijani government organ in the form of the justice ministry has also expressed interest in blockchain for its own processes, Cointelegraph reported late last year. cointelegraph.com/news
II. Legal & Politics
Russia’s parliament, the State Duma, is considering imposing administrative responsibility for the mining of cryptocurrencies, local news outlet TASS reported on June 7. In an interview with TASS, Anatoly Aksakov, the chairman of the State Duma Committee on the Financial Market, said that the government may introduce administrative responsibility for digital currency mining by the end of June. Aksakov stated: “I note that any operations with cryptocurrency that are contrary to the Russian legislation will be considered illegitimate. This means that mining, organizing issuance, circulation, creating exchange points for these tools will be prohibited. Administrative liability in the form of a fine will be incurred for such actions. We believe that cryptocurrencies created on open blockchains such as bitcoins, ethers, and others are illegitimate tools.” Aksakov, however, stressed that despite the mining ban in Russia, it is still possible to own bitcoin (BTC) if it was acquired under foreign law at foreign sale and exchange points. He also suggested that mainstream interest in bitcoin could appear again once the speed of transactions increases. Russia’s major crypto bill, “On Digital Financial Assets,” had been approved by the Russian parliament in May 2018, but was subsequently sent back to the first reading stage after reports of its lack of major key concepts such as crypto mining, cryptocurrencies, and tokens. Russia has since further postponed the adoption of the crypto legislation due to a requirement from the Financial Action Task Force on Money Laundering (FATF) concerning the addition of the crypto-related terms. Earlier in June, Lyudmila Novoselova, chairman at the Court for Intellectual Rights of Russian Federation and a judge at the Supreme Arbitration Court, had also argued that the term digital assets should be included in the Russian Civil Law. cointelegraph.com/news
G20 finance ministers and central bank governors have asked the Financial Stability Board (FSB) and global standard-setting organizations to monitor risks around crypto assets. The request was made in a joint communiqué published on the website of Japan’s Ministry of Finance on June 9, following the G20 meeting held in Fukuoka, Japan. The leaders that cosigned the document state that they urge relevant institutions to give greater consideration to crypto assets and consider appropriate action: “We ask the FSB and standard-setting bodies to monitor risks and consider work on additional multilateral responses as needed.” The joint statement also points out that “technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy.” This exact sentence was also included in the document released after the G20 summit held in July last year in Buenos Aires. After expressing such optimism, the authors of the paper also raised concerns over those technologies: “While crypto assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT).” The latest statement notes that the involved parties look forward to the adoption of the Financial Action Task Force’s (FATF) Interpretive Note and guidance on crypto assets “at its [FATF’s] plenary later this month.” The leaders also state that they reaffirm their commitment to applying the recently amended FATF standards for crypto. The document also states that the finance ministers and central bank governors welcome work concerning crypto carried out by international regulatory bodies, the International Organization of Securities Commissions and the FSB. As Cointelegraph reported yesterday, blockchain analysis firm Chainalysis, which has “engaged directly with global regulators,” noted that it would be surprising if the involved parties agree on something new during the G20 summit this year. In April, Japanese media reported that during the meeting of central bank governors and finance ministers in Fukuoka, leaders were expected to establish new AML regulations. cointelegraph.com/news
Indian lawmakers have reportedly proposed to enforce a 10-year jail term for citizens who deal with cryptocurrencies, local financial news agency BloombergQuint reports on June 6. The new tough crypto regulation is a part of a recently proposed draft bill called “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019,” according to a report by crypto news outlet The Block. The regulation will reportedly relate to those who mine, hold, buy and sell cryptocurrencies, as well as those who deal with cryptocurrencies directly or indirectly in the country. If passed, India’s bill will order cryptocurrency holders to declare their crypto assets within 90 days and to dispose the assets “in accordance with the prescription of central government,” the report notes. The bill includes a penalty system that reportedly envisions fines worth a three-fold amount from the “loss caused to the system” or from the gains of crypto holders, according to The Block. Considered as “cognisable and non-bailable,” the offense can also lead to a 10-year jail sentence for those who break the new rules. The new bill reportedly proposed the development of a new national cryptocurrency called the Digital Rupee, while India’s central bank, the Reserve Bank of India (RBI), reportedly postponed its plans to release a central bank digital currency (CBDC) in early 2019. The first inter-ministerial consultations on the bill banning cryptocurrencies in India started in April 2019, when local news agencies reported about a new bill that intends to completely ban cryptocurrencies in the country. On June 4, the RBI officially denied its involvement or knowledge of a draft government bill, claiming that the bank has had no communication with the central government about the new law and had not received a copy of the bill. cointelegraph.com/news
The vice president of Brazil’s biggest bank, Bradesco, revealed that major local banks will introduce a unique blockchain platform on June 12, Cointelegraph Brazil reports on June 11. Bradesco VP Mauricio Minas has delivered a speech devoted to the role of blockchain in the global financial system, speaking at major Latin American banking and fintech event CIAB Febraban on June 11. The Bradesco VP unveiled the plans of local banking institutions to soon adopt an unnamed blockchain-powered solution, adding that a number of Brazilian banks have been developing applications using distributed ledger technology (DLT). Speaking at the event, Minas expressed confidence in blockchain technology despite its nascent character, urging that the technology is able to “break traditional barriers,” as well as to change user behavior and the financial system. The news comes on the heels of the recent report on Brazilian banks deploying a standardized blockchain identity solution co-developed by the country’s central bank, CIP, and global tech giant IBM. Based on the open source DLT Hyperledger Fabric, the identity solution will be reportedly integrated into the Brazilian Payment System and will be used by all banking and financial institutions across the country. Yesterday, Cointelegraph reported on leading cryptocurrency company Ripple’s launch of an office in Brazil with the wider aim to expand across Latin America. cointelegraph.com/news
United States’ payment giant Visa has launched a cross-border payment network derived from some aspects of blockchain technology, Reuters reports June 11. The network, called “Visa B2B Connect,” is designed to facilitate international payments made by global financial institutions by enabling direct interbanking transactions between businesses and beneficiaries. According to the report, the network already covers 30 trade channels worldwide to enable faster and cheaper cross-border payments, and is expected to expand to 90 markets by the end of 2019. Visa B2B Connect is partially based on blockchain technology, containing elements of Hyperledger, the open source distributed ledger technology (DLT) developed by a group led by the Linux Foundation, the report notes. Specifically, certain aspects of blockchain tech were reportedly used due to its capability to transfer more data on a payment than any existing payment system, global head of Visa Business Solutions Kevin Phalen said in the report. The new network is a result of collaboration with tech global giant IBM, as well as e-payment operator Bottomline Technologies and fintech firm FIS. In order to develop the product, Visa was reportedly initially working with cryptographic ledger systems builder Chain. Recently, Visa also partnered with the fintech operator of Japanese messaging app LINE — LINE Pay Corporation — in order to develop new blockchain and digital payments solutions. Earlier this year, software startup DataLight released a report claiming that bitcoin (BTC) has a potential to replace global payment systems such as Visa and MasterCard within ten years.
There’s a lot of debate over whether bitcoin mining is bad for the environment. Many bureaucrats and mainstream media pundits claim that mining is wasteful and bitcoin’s energy consumption cannot be ignored. However, these claims have been refuted in the past and on June 6, Coinshares published a report that details mining is not environmentally imprudent but rather 74.1% of the Bitcoin mining industry is “heavily” driven by renewable energy sources. There’s been clamoring over the years concerning bitcoin mining and how people believe the energy resources the industry consumes is reckless. For instance, there have been countless reports stemming from China that allege Chinese politicians are negative about the mining industry within the country. For years now the majority of bitcoin miners have been based in China and recently the country’s National Development and Reform Commission (NDRC) wrote on April 9 that the department believes bitcoin mining “wastes resources and pollutes the environment.” This week Coinshares, a crypto investment products and research company, published an in-depth report that states otherwise and highlights how renewable energy is dominant within the bitcoin mining industry. Throughout the report, Coinshares explained how the firm researched the efficiency, electricity consumption, electricity sources, geographical distribution, and composition of the mining network on the BTC chain. At the moment the study explains that the market average since November for the cost of creation at $0.05 per KWh and “depreciation schedules has decreased from approximately $6,800 to approximately $5,600.” This means at current prices mining bitcoin is very profitable and the researchers note that even older mining rigs are competitive. The biggest takeaway from Coinshare’s report is that most mining facilities are located near renewable energy suppliers. Coinshare’s June 2019 study states: “We calculate a conservative estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 74.1%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world.” news.bitcoin.com
Multiple sources are expecting Facebook to launch its stable coin on June 18, IT and fintech magazine TechCrunch reported on June 6. Citing people familiar with the plans, the publication added strength to existing suggestions from both within and outside the company that its secretive cryptocurrency project would appear this month. Previously, rumors had suggested it would be 2020 before Facebook made a commitment to bring its product, which should focus on remittances, to market. “It’s currently scheduled for a June 18th release of a white paper explaining its cryptocurrency’s basics,” TechCrunch states. That date had also come from Laura McCracken, Facebook’s Head of Financial Services & Payment Partnerships for Northern Europe, who said in an interview with German finance magazine Wirtschaftswoche this week the stablecoin would not only involve a U.S. dollar peg. “The value of Facebook Coin will be secured with a basket of fiat currencies,” she told the publication. Facebook has caused an industry-wide stir with its noises about entry into the payments sector. Not just the social media platform, but sister companies WhatsApp and Instagram would also participate, executives said. Criticism of such projects nonetheless remains, most recently coming from U.S. ratings agency Weiss Ratings, which in a dedicated blog post claimed tech firms’ ultimate goal was not to broaden the appeal of cryptocurrency, but to take business away from the banks. “Longer term, Bitcoin and other cryptocurrencies are now in a long-term bull market. And one key reason is their powerful potential to truly disrupt the financial system as we know it today,” developer Juan Villaverde wrote. “Still, many analysts don’t see it that way. They think it’s apps like Apple Pay, Google Pay and Alipay that could challenge the global financial system, even ‘replacing banks’ with their new payment platforms.” The post noted: “I believe that’s a collective delusion. Truth be told, they’re not replacing banks; they’re becoming banks.” cointelegraph.com/news
United States-based cryptocurrency exchange and wallet service Coinbase has launched its Visa debit card in six European countries, CNBC reports on June 11. As of today, cardholders in Spain, Germany, France, Italy, Ireland and the Netherlands will be able to use the cards, which sync directly to their Coinbase accounts. The card comes as both a mobile app for iOS or Android, and as a physical card that can be used to withdraw fiat currencies from automatic teller machines. Coinbase’s new offering purportedly allow users to spend cryptocurrencies they hold at any merchant that accepts Visa cards. Users can decide which cryptocurrency they wish to use to make a payment in the app, while Coinbase subsequently converts the crypto to cash, for a fee. Coinbase U.K. CEO Zeeshan Feroz said, “You can buy groceries on bitcoin (BTC) and then coffee on litecoin (LTC) right after.” The card first launched for users in the United Kingdom in April of this year. The card was issued by Paysafe Financial Services Limited, which is regulated by the Financial Services Authority as a certified issuer of electronic money and payment instruments. The San Francisco-based exchange has been expanding its offerings significantly over the course of the year. Last month, it expanded trading services to 50 more countries and added trading support for its stablecoin USDC in 85 countries. Coinbase also added the dai stablecoin to its Coinbase Earn program, which rewards users with crypto for watching educational videos. Despite its recent additions, Coinbase Vice President of Business, Data and International Emilie Choi said that it is not currently investing in the decentralized exchange sector even after the acquisition of decentralized peer-to-peer trading platform Paradex last year. Choi said: “We have to make sure that if we offer a dex that we’re doing it in a way that is safe and secure and compliant. I think that there’s not a lot of clarity right now on how that would work. We think this space is interesting but we’re not actively investing in it right at this moment.” cointelegraph.com/news