Jul 042017
 
Some Central Banks Are Exploring the Use of Cryptocurrencies By Alexandria Arnold June 28, 2017, 11:18 AM CST In a world were financial transactions are largely electronic, central banks are exploring the idea of using virtual currencies, even as cyberattacks and price swings dominate the headlines. "The central bank digital currency would be like a paper bill except digital," Dartmouth College economics professor Andrew Levin said in an interview on Bloomberg Television. For example, "it would be representing a U.S. dollar, but it would be basically free to use."     Dartmouth’s Levin tells Bloomberg TV why central banks are exploring the move to digital currencies. Source: Bloomberg Whereas credit cards charge transaction fees and interest, and paper currencies can be costly to process, digital currencies could be a "real benefit" to small businesses and consumers, Levin said. Central banks from across Europe and Asia are looking into virtual currencies. In March, Vietnam’s central bank said it was "seriously" studying the possibility of using bitcoin. The People’s Bank of China has run trials of its prototype cryptocurrency, and the Danish central bank is considering minting e-krone. But Federal Reserve Board Governor Jerome Powell said in March the U.S. central bank is not considering a digital currency. For a replay of the inaugural Bitcoin Facebook Live show launched yesterday. Skeptics have questioned whether one of the key features of cryptocurrencies — their decentralized nature — makes them a good fit for central banks. But in a recent proposal published by Levin and Rutgers University economics professor Michael Bordo, the pair said central banks could provide a secure store of value in their own digital currency. "In contrast to bitcoin, the value of the central bank’s digital currency would be fixed in nominal terms," Levin and Bordo wrote. "Moreover, the central bank’s digital currency could be implemented using an account-based system, thereby avoiding the resource-consuming ‘mining’ operations involved in generating virtual currencies like bitcoin." Source: Some Central Banks Are Exploring the Use of Cryptocurrencies – Bloomberg Share this:FacebookLinkedInTwitterGoogleTumblrPinterestReddit (more…)
Jul 012017
 
BIJAN SHAHROKHI JUNE 18, 2017 2:33 PM   With the recent surge in value of cryptocurrencies, ordinary people and traditional investment firms are paying more attention to the space. The market cap of cryptocurrencies has grown from less than $30 billion in March 2017 to over $110 billion in June 2017, and this is just the beginning. Cryptocurrencies are quickly becoming a new global market for assets, similar to stocks, bonds, mutual funds, and government backed-currencies.   But the immediate settlement of currency transfer on blockchains (such as Bitcoin and Etherium) is a double-edged sword. On the one hand, it’s incredibly efficient at money movement; on the other, it allows bad players to transfer your cryotcurrency with the same speed. And if the wrong person gets unauthorized access to your cryptocurrency holdings and transfers the currencies to their own wallet, there will be no getting it back.   As a result, among new investors in the space, there is a concern about giving money to new, unproven, and non-regulated online-only cryptocurrency wallet providers. And that opens up an opportunity for traditional banks. You already trust them with your life savings, so you will likely trust them with your cryptocurrency holdings.   It would take an enormous investment for banks to move into this space. But here are some reasons they should consider it:   They can address a real pain point for their customers: Cryptocurrency investors are concerned about trusting recently established organizations to hold their assets. Banks are reliable alternatives because people trust them. Banks entering this space will solve a real financial problem for their customers and will deepen and reinforce their relationship.   They will stay relevant: Cryptocurrencies such as Bitcoin might become more popular than government backed currencies one day. The only way for a bank to stay relevant in that future is to secure their relationship with the cryptocurrency holder today. As time goes on, new players will slowly earn a reputation for safety and security and will present a threat to existing financial institutions. Now is the time for banks to secure those relationships while they still have an advantage over existing and entering players.   They will start learning by doing: Cryptocurrencies are here to stay. Banks must start learning how these markets operate and discover the right business models for their organizations before fintech companies make them irrelevant. A great way to (more…)
May 062015
 
[ This is very disturbing. I am a student of cryptocurrencies and propose that cryptocurrencies will be the solution to the coming collapse of the dollar] Simon Black gives continuously good advice. If you are having trouble viewing this email, or you’d like to share this article with your friends, click here May 6, 2015 Sovereign Valley Farm, Chile Well, it was bound to happen sooner or later. Our beloved amigos at the US Financial Crimes Enforcement Network (FinCEN), have just issued the first-ever ‘civil enforcement action’ against a virtual currency. The offending criminal mastermind in this case? Ripple Labs. If you’re not familiar, Ripple is a virtual currency platform that was once the darling of Silicon Valley, attracting top VC firms like Google Ventures and Andreessen Horowitz. Ripple’s technology allows users to conduct financial transactions with one another — sending and receiving payments in cryptocurrencies like Bitcoin, as well as fiat currency. Imagine Bitcoin meets Paypal… and you have the basic idea. As part of its technology, the parent company Ripple Labs also created a native virtual currency called ‘XRP’, which is the second largest in the world after Bitcoin when measured by market capitalization. Because of all of these features, Ripple Labs qualifies as a ‘money service business (MSB)’ according to FinCEN… which makes them subject to all sorts of regulations. At the top of the list is the Bank Secrecy Act (BSA), which, contrary to its name, requires banks and MSBs to betray their customers’ financial secrets to the US government. Specifically, the BSA mandates that all banks and MSBs file ‘suspicious activity reports’ if they “know, suspect, or have reason to suspect” that a transaction of $2,000 or more is ‘suspicious’. And in the age of the USA PATRIOT Act, suspicious transactions are BIG BUSINESS for Uncle Sam. Last year a record 2.4 MILLION suspicious activity reports were filed. That’s a 40% increase from 2013’s record year of 1.7 million. As you can imagine, Ripple Labs failed to register with FinCEN as an MSB, nor did it submit suspicious activity reports. In its complaint, FinCEN describes several of the oooooh-so-nefarious violations. According to FinCEN, “In January 2014, a Malaysian-based customer sought to purchase XRP from [Ripple Labs], indicating that he wanted to use a personal bank account for a business purpose.” HOLY JIHAD BATMAN!!!! Someone wanted to use a personal bank account for business purposes?!?! NUKE THE (more…)