Financial Institutions Use Stablecoins to Shake Things Up in 2020

For most people, the word “stablecoin” brings to mind cryptocurrencies like Tether or Libra. However, there are many versions of stablecoins — ranging from those that are backed by fiat money to those that are backed by real assets or even other digital currencies.

Simply put, a stablecoin’s main aim is to solve the problem of volatility by being a digital asset that is tied to another asset with a stable value.

The new year is already turning out to be an exciting time for stablecoins as interest among financial institutions picks up speed. There is talk of companies like Wisdomtree, a New York-based asset manager and leader in exchange-traded funds with over $68 billion in assets under management, mulling over plans to launch a regulated stablecoin.

Likewise, governmental financial institutions are now coming out of the woodwork, stating that they will either be researching or discussing a stablecoin as a potential solution. International entities, such as the G-7 Working Group in partnership with the International Monetary Fund and the Bank for International Settlements, have released a report investigating the impact of stablecoins.

Furthermore, banks such as Banco Bradesco, Bank of Buscan and Rizal Commercial Banking Corporation jumped on the stablecoin bandwagon last year in a move to issue their own stablecoins on IBM’s blockchain.


News about WisdomTree’s plan to launch a regulated stablecoin has had many in the crypto space speculating about a buildup in competition for dominance in the space. For WisdomTree, the move is believed to be a natural extension of its ETF business.

According to the company’s director of corporate strategy, William Peck, “a regulated WisdomTree stablecoin could look similar in structure and purpose to an ETF backed by dollar-denominated assets like short term U.S treasury bonds.”

Related: WisdomTree Grows a Stablecoin Today to Nurture a Crypto ETF Tomorrow

Peck further added that this option could appeal to crypto traders, since the stablecoin would be powered by blockchain. In the long run, Peck believes that a regulated stablecoin issued by WisdomTree could position the firm as a leader in a fast-evolving industry.

For stablecoin issuers in the United States, one of the biggest hurdles is the reception from regulatory authorities. However, the story might be a little different for WisdomTree, given that the firm is a regulated money manager. Therefore, a proposal from the asset manager is more likely to receive a better reception from regulators.

Furthermore, since it stands among industry giants like BlackRock and Fidelity, WisdomTree can bring about an enterprise-level approach to the crypto industry. Although WisdomTree has yet to file a public and official proposal with the relevant authorities, the firm has already shown enough interest in the space, with reports of the firm being a leading investor in a new startup called Secucurrency, a company that ensures regulatory compliance on blockchain systems.

State Street

Another American financial Services company that is slowly but surely dipping its toes in the stablecoin universe is State Street. Last month, the company announced its plans to launch the pilot phase of a digital asset in collaboration with Gemini Trust.

The plan is to combine State Street’s back-office reporting with Gemini’s research on digital assets to enable users to consolidate their traditional assets serviced by StateStreet with that of their Gemini-processed digital assets.

Founded by the Winklevoss twins, Gemini Trust is one of the pioneering issuers of regulated stablecoins. According to their white paper, Gemini (GUSD) is a regulated stable value coin that is built on Ethereum and pegged 1:1 to the U.S. dollar.

In the announcement of the firm’s plans to venture into the crypto space in partnership with Gemini Trust, State Street’s Managing Director Ralph Achkar said, “The digital asset space is still in its nascent stage, yet it promises opportunities that could fundamentally impact how StateStreet does things in the future.”

Related: The Unstoppable Trajectory: Stablecoins Are Evolving Traditional Finances

Just like WisdomeTree, StateStreet admits that its new project is nothing more than a natural extension of the services it offers its clients. The financial services provider boasts $32.9 trillion in assets under custody and almost $3 trillion in assets under management.

Although the move by StateStreet is not directly linked to Gemini’s stablecoin, it is still a clear sign that the financial firm is taking steps to help clients invest in digital assets. According to Achkar, “the digital asset space is something that will impact the market going forward and we want to be there when this happens.”

IBM in partnership with several international banks

In March 2019, IBM announced the launch of its global payment network that includes payment location in 72 countries with 44 banking endpoints. The tech giant signed partnerships with Banco Bradesco, Bank Busan and Rizal Commercial Banking Corporation to enable them to issue stablecoins on IBM’s blockchain network.

Unlike most companies in the stablecoin landscape, IBM is not the issuer of the stablecoins. However, the banks it partners with have signed a letter of intent to issue their own stablecoins with support for multiple fiat currencies.

According to Jesse Lund, the vice president of IBM Blockchain, IBM has “created a new type of payment network that is unique in the sense that it streamlines the ability of businesses and consumers to move money around the world in real-time.”

Lund further added that the company is “covering a brand new network in 72 countries that will support pay-in and payout endpoints in 48 currencies.”

The Central Bank of Russia

At the tail-end of 2019, Russia’s central bank started testing the idea of utilizing a stablecoin. Unlike most fiat-based stablecoins, these would be pegged to real assets and put in a regulatory sandbox. According to Elvira Nabiullina, the head of the Russian Central Bank, the purpose of testing out the stablecoins is not necessarily to have them be used for making payments.

However, the plan is to come up with a “special set of rules that allows innovative companies to test their products and services” in a limited environment without the risk of breaking financial laws — commonly known as a sandbox.

Nubiullina also pointed out that the project will enable the central bank to learn “the potential uses of stablecoins” as it continues to explore the possibility of issuing its own central bank digital currency.

Although Russia is making moves to learn more about stablecoins, Nubiullina made it clear that the official stance of the government is against private money and that the Central Bank of Russia cannot support digital currencies that are designed to substitute for private money.

Central bank of France

France is also planning to launch a pilot project to test a cryptocurrency designed for financial institutions. While speaking to a news conference in Brussels, Governor François Villeroy de Galhau said that the country’s central bank plans to begin testing the digital euro project by the end of the first quarter of 2020.

The digital euro will solely be aimed at private financial players in the country to strengthen the French financial system. The official report also stated that the main focus of the pilot project is to establish France as a global leader of central bank-issued digital currencies.

Earlier on, France and Germany were skeptical of Facebook’s Libra project, saying that the project posed risks to Europe’s financial sector. Now, it’s clear that their plan was to launch a common set of rules for virtual currencies in the Eurozone.

Although it will take time to develop a regional stablecoin, French Finance Minister said, “The fact that it is for the long term does not prevent us from working and having results next year.”

China’s digital yuan

Another central bank poised to become one of the first to issue its stable digital currency is the People’s Bank of China. Amid a swiftly digitizing economy, the Chinese central bank’s move is an attempt to manage the technological change to its terms. One official of the PBoC told Bloomberg that the move goes beyond economic issues to include issues of sovereignty.

Although the PBoC plans to launch a digital yuan, it is not necessarily going to be a cryptocurrency. First of all, unlike decentralized cryptocurrencies, the digital version of the Chinese yuan will be fully backed by the PBoC. This means that the digital yuan won’t have any presumption of anonymity.

Also, given that records of China’s payment traffic peak at about 92,771 transactions per second, central bank officials in China are skeptical about blockchain’s capacity to support such traffic.

Even though China is already a highly cashless society, the move to launch a digital yuan will protect the country from having to adopt other increasingly popular digital currencies like Bitcoin. PBoC’s plans are also in line with the government’s agenda of countering the strengthening dollar especially in the wake of trade wars and the rise of multiple stablecoins backed by the U.S. dollar.

Where does the stablecoin stand?

So why are all these financial institutions, central banks and companies embracing the idea of stablecoins? Biser Dimitrov, co-founder of BlockEx digital asset platform told Cointelegraph that “stablecoins just make sense for any type of financial services company,” adding:

“For example, in a retail or investment bank, a stablecoin can facilitate faster intra-day settlements, full transparency. More to that, a bank can offer better and faster services on top of a blockchain network with a stablecoin and enable things like loyalty points conversions, faster mortgages and generally efficient loan origination process.”

However, with increased adoption of stablecoins comes the challenge of regulation, and Gregory Klumov, CEO and co-founder of Euro-backed stablecoin Stasis, believes there is a solution. Klumov told Cointelegraph that regulation will first evolve in the retail space before coming to the e-money directive:

“In the private corporate space nobody will regulate what solution particular corporation utilizes. A good analogy could be antivirus or project management software. The core value of any stable asset is fungibility. The more counterparties support it, the more network effect it will achieve.”

But as much as the issue of regulation can be a problem for stablecoins, Dimitrov believes that for 90% of issued stablecoins, regulation will be more relaxed in the future, as the developed assets will be used for internal purposes.

Source Cointelegraph

Tax Agencies Step Up Efforts to Hone in on Crypto Tax Evasion

The year 2019, for a short while, raised expectations that stablecoins would bring about mass adoption of cryptocurrencies. 2020, however, seems to be dousing those hopes with ever-tightening regulation that is putting pressure on investors and companies alike.

The first complication came only 10 days into the year. In early January, the European Union’s landmark Fifth Anti-Money Laundering Directive, or 5AMLD, was signed into law. The law is the latest evolution of the EU’s response to the Panama Papers scandal, in which a leak of over 11 million documents uncovered the opaque financial networks used by the world’s richest and most prominent individuals to divert wealth overseas.

The era-defining financial scandal shone a light on a controversial characteristic of international finance that would soon spell trouble for cryptocurrency investors and businesses the world over: anonymity.

Lawmakers are constantly striving to tighten the legal loopholes that allow the world’s richest companies and individuals to avoid paying their dues. Try as they might, there are still states, often small island nations in the Caribbean, that willingly provide less legally restrictive environments.

Choosing to divert financial flows offshore is often not illegal at all, but the emphasis that companies such as the now-disgraced Mossack Fonseca place on privacy means that it is difficult for law authorities to bring individuals using such networks for criminal activities, such as money laundering, tax evasion or terrorist financing, to justice.

From the 5AMLD to central bank digital currencies, governments and regulators are acting on their belief that the identities of individuals behind anonymous transactions should be made available to authorities upon request.

Additionally, even though the United Kingdom is set to leave the EU in roughly one week’s time, its anti-money laundering regulations closely match the 5AMLD, and recent events indicate that measures are being increased even further to prevent cryptocurrency from being used to flout the law.

The taxman cometh

One of the criticisms of post-Brexit Britain is that it will relax financial regulation in order to form lucrative trade deals in the wake of its departure from the EU single market. Although the U.K. has seen numerous financial scandals, its tax agency is looking to minimize the blind spots in the defenses against crime involving cryptocurrency.

Her Majesty’s Revenue & Customs announced that it had posted a $130,000 open contract call to develop a tool to help the tax agency gather intelligence through cluster analysis. The announcement is the latest step on behalf of European lawmakers to break through the anonymous qualities of cryptocurrencies, taking aim at both the biggest coins and privacy tokens, such as Monero (XMR), Zcash (ZEC) and Dash (DASH).

As previously reported by Cointelegraph, although most users of such coins use them for entirely honest purposes, both law authorities and regulators are concerned by the potential for privacy coins to be used for nefarious activities, such as the sale of illicit drugs on the darknet, as well as terrorist financing and money laundering.

The regulatory changes and mounting compliance demands did not surprise Dash Core Group Chief Marketing Officer Fernando Guitierrez. In an email conversation with Cointelegraph, Gutierrez put forward his view that the changes will not only be a hindrance to companies but also to the average consumer. He believes that: “This was all bound to happen.” He added that there was little chance that a growing industry would escape unnoticed:

“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don’t will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”

The offering of the open contract from the HMRC is a signal that it is committed to effectively ramping up its blockchain forensics capabilities. Rich Sanders, principal and lead investigator at the Cipherblade Ltd blockchain analytics firm, told Cointelegraph that such a small contract is unlikely to shake up the system to any great extent:

“As for this particular initiative, a £100,000 software contract for a year says something but not very much in the grand scheme of things.”

How effective are blockchain forensics tools?

While data about transactions using cryptocurrency is stored on the blockchain, it is not possible to identify individuals from this information alone. Prior to the recent changes in legislation, blockchain analytics companies cooperated with intelligence agencies to link suspicious account activity to the individuals behind them.

Although the powers given to law authorities and compliance organizations under the 5AMLD are likely to radically change the way in which such procedures are carried out, Sanders believes that analytics tools are not a one-time fix for all anonymous crypto activity since: “Blockchain analytics tools do not inherently and directly crack the anonymity,” or, more accurately, the pseudonymity, which is an attribute of blockchains. Therefore, forensic tools are only one element of a comprehensive investigative toolkit. He went on to add:

“The way, in which a blockchain analytics tool can help in linking the pseudonymous blockchain identity to an individual is by tracing cryptocurrency from/to initial/terminal destinations such as exchanges and other services, from which data can then be requested — which will often require a subpoena to be served or, at a minimum, another legally constrained form of data request.”

Sanders explained that, when examining the powers of blockchain analytics tools in bringing tax evaders to justice, it is important to note that there must first be pre-existing suspicion of wrongdoing:

“Blockchain analytics tools are likely to be brought to bear only in cases of existing and substantiated suspicion and are not themselves suited to finding potential tax evaders in the sea of cryptocurrency users. If that’s what you want to do, you’ll have a better time — as I once semi-seriously advised IRS employees — browsing through Reddit and looking at the chest-beating about tax evasion there (by accounts with poor OPSEC).”

Many in the sector welcome the regulatory changes. This chummy approach to cooperation with state organizations is not, however, shared by all. Dash Core Group’s Gutierrez told Cointelegraph that, in spite of their duty to protect, not all governments and intelligence agencies honor this:

“This has happened even in democratic countries, so we can’t assume that everything they do is fair or well-intentioned. Only where there is a real separation of powers, and the judicial one has consented, on a case by case basis, they should have such a right, if technically possible. If that can’t be guaranteed — and it can’t — it is better if they stay away.”

How will regulation affect crypto?

Cryptocurrency is still a young industry and faces many challenges on the road to becoming a mature sector that can compete with wider mainstream finance, should that ever happen. The steady increase in regulatory and compliance demands are only to be expected as the nascent crypto industry inches closer to being used by a greater customer base.

Regardless of the titans of the tech industry toying with the idea of starting cryptocurrencies of their own, even some of the larger financial companies simply cannot take on the high level of risk associated with crypto at its current stage.

Some industry leaders recognize this turn as a welcome sign that digital currencies are being taken more seriously by regulators and lawmakers around the world. For others of a more anarchistic philosophical standing, the loss of anonymity is a loss of one of the core precepts behind the entire reason for cryptocurrency’s being.

Gutierrez says that, while regulation is bound to happen to any growing financial industry, the costs associated with being regulated to an extreme level could well choke out smaller players and lead to an eventual stagnation:

“The constant introduction of new regulations is already changing the industry. Compliance costs have grown so much that only big players can afford them. This is only going to get worse. We will have fewer new projects and that will hinder innovation. I foresee a future, in which the blockchain industry resembles more and more the financial industry it proclaimed it would replace: well-funded players, slow change and lawyers everywhere.”

While Gutierrez foresees a slowdown in the near future, Andrew Adcock, CEO of the London-based crowdfunding platform Crowd for Angels, told Cointelegraph that the firm has not picked up on any discernible change in investor behavior in the wake of the regulatory changes:

“We haven’t seen a large change in investor and consumer attitudes, however, there has been a notable increase from companies seeking to implement changes and abide by the new regulation. I believe this is positive and will provide great protection for investors.”

Although any kind of attempt to hinder the supposedly essential core characteristics of cryptocurrency will create intense debate among investors, industry leaders and regulatory bodies, not all people are so fussed about the changes.

Adcock said that many of the clients at Crowd for Angels are not overly interested in the topic. Despite the doomsayers of the crypto industry, Adcock maintained his view that regulation is something to be encouraged and does not believe that this will alienate investors: “There will always be those who seek anonymity, and this might be challenged by regulation, but harmony between both positions can co-exist.”

Source Cointelegraph

Litecoin Creator Proposes Miners Voluntarily Donate 1% for Development

Litecoin (LTC) founder Charlie Lee proposed mining pool donations as a new funding method for cryptocurrency development.  

“I think a better way to fund development is mining pools voluntarily donate a portion of the block reward,” Lee said in a tweet on Jan. 24, adding:

“How about Litecoin pools donate 1% (0.125 LTC) of block rewards to the @LTCFoundation? If every miner/pool does this, it amounts to about $1.5MM donation per year!”

With 1% donated on a consistent basis, Lee’s suggested solution would provide enough funding for Litecoin permanently going forward, Lee confirmed to Cointelegraph.

He explained:

“At current LTC price, 1% of block rewards is about 7x Litecoin Foundation’s yearly expenses. Even if a small percent of miners are generous enough to donate, the foundation would be able to put it to good use by funding developers to work on Litecoin Core, Mimble Wimble, LiteWallet, LN wallet, hosting the yearly Litecoin Summit, and pushing for adoption of Litecoin by merchants and users.”

Lee also confirmed such donations are voluntary, adding, “It wouldn’t be right if it wasn’t voluntary.” 

Funding issues

Garnering enough capital to run and operate a business can be difficult. The situation becomes more complicated when the business or project aims for decentralization. 

Rumors circulated in late 2019 regarding the Litecoin Foundation’s potential bankruptcy, which Lee denied in an Oct. 13 tweet. “Don’t listen to stupid fud and lies,” Lee said. “We have enough money to last 2 years.”

Lee’s 1% voluntary donation proposal comes after Bitcoin Cash (BCH) proponents Roger Ver and Jihan Wu suggested an “infrastructure funding plan,” requiring miners to pay 12.5% of block rewards to an operation in Hong Kong, Cointelegraph reported on Jan. 24. 

New concepts

In response to 51% attack concerns, Dogecoin merged its mining with Litecoin in 2014, enabling simultaneous mining of the two assets. Notably, this joint Litecoin and Dogecoin mining impacts Lee’s new mining pool donation concept. 

“Currently with merged mining of Dogecoin and other Scrypt coins, miners make 105%+ of block rewards,” Lee noted in a second tweet. “So 1% is a reasonably small amount to give back towards funding a public good.” 

Finally, Lee also toyed with the idea of miners choosing which Litecoin project their funds will go toward, asking the community for their opinions on his ideas as a whole.

“It’s important that miners can choose to support other Litecoin organizations as well,” he told Cointelegraph. “Miners should donate to the organizations that want to help out.”

Source Cointelegraph

Is Tron’s DApp Market Dependent on Gambling?

Tron has made a name for itself in the crypto asset space and DApp world, although a huge portion of the protocol’s transactions rely on the gambling industry.

A hefty 17 of the top 25 most-used Tron DApps fall in the gambling category on DappRadar’s list of most popular Tron protocol-based DApps.

Top 25 lists

The eight non-gambling Tron-based DApps on the list fall in several other categories, such as High-Risk, Exchanges and a general “games” tag.

These non-gambling DApps, however, host significantly less volume than their gambling counterparts, with the exception of two other applications listed as exchanges.

In contrast, the top 25 Ethereum-based DApps counted only three gambling applications.

Tron prevalence

April 2019 showed Tron touting the most rapidly expanding group of DApp users.

Ethereum, Tron and EOS ran the show in 2019 in terms of DApp usage, taking a combined 98.65% of the total DApp transaction volume for the year, as Cointelegraph reported in January 2020.

Tron’s ecosystem posted a staggering $4.4 billion in volume in 2019, with its gambling DApps filtering approximately 89% of that money flow, DappReview said in its 2019 DApp write-up, calling Tron’s decentralized application ecosystem, “Las Vegas on the blockchain.”

Meanwhile, Tron founder Justin Sun pulled up a chair next to Apple co-founder Steve Wozniak for lunch earlier this week, tweeting about the meal after the fact on Jan. 24.

Cointelegraph reached out to Justin Sun for comment but received no answer as of press time. This article will be updated accordingly upon receipt of a response.

Source Cointelegraph

Major Bitcoin Cash Pools Force 12.5% Mining Tax on Community

Leading Bitcoin Cash (BCH) personalities, including Bitmain CEO Jihan Wu and CEO Roger Ver, proposed on Jan. 22 an “infrastructure funding plan” that would see miners donate 12.5 percent of all block rewards to a Hong Kong entity. Many in the community turned harsh critics of the proposal.

The fund would be used to promote Bitcoin Cash development, which the miners argue is a “far better solution” than having independent “corporate donors,” such as the Blockstream company for Bitcoin (BTC).

The initial funding would be activated in May 2020 and run for six months. The expected revenue, based on current prices, would be approximately $6 million. This money would be donated for management to a Hong Kong corporation. It is worth noting that the proposal would activate around the scheduled reward halving. With current block rewards, the revenue would amount to about $13 million

Published by the CEO of the mining pool, Jiang Zhuoer, the post revealed that the proposal is supported by Jihan Wu, who controls the Antpool and pools; Haipo Yang, from ViaBTC; and Roger Ver, CEO of

Together, they account for approximately 27 percent of BCH’s hashrate, with the majority being in the hands of unknown miners.

One of the more controversial aspects of the proposal is a stated willingness to “orphan” blocks of miners who do not comply. Orphaning blocks is the practice of removing blocks from the chain and is generally similar to a 51 percent attack. 

Zhuoer revealed in a Reddit Ask Me Anything (AMA) that the organizers would divert some of their BTC hashrate, of which they hold 30 percent, to ensure compliance.

Community criticism

Many in the Bitcoin Cash community criticized the decision for a number of reasons.

The primary concern is about centralization. The funds would be routed to a corporation, instead of a nonprofit foundation. The absence of any kind of voting procedure would mean that the owners of the company would have control over all Bitcoin Cash development, the community argues.

Some also levied concerns of Chinese government interference. Profitability issues were also mentioned, as the “tax” would directly affect the amount of revenue going to miners.

Amaury Séchet, a Bitcoin Cash developer, defended the proposal arguing that due to the nature of mining, it is not compulsory. However, he conceded that control of the funds is an important issue. Séchet proposing a committee of people with a “proven track record” of supporting the project, which would include himself.

In the AMA, Zhuoer gave vague answers to questions of governance, saying that those details “are under discussion.” But he reiterated that, even though the details may change, the mining tax will still be introduced. and representatives did not immediately reply to Cointelegraph’s inquiries.

Source Cointelegraph

Price Analysis Jan 24: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XLM, ADA

Price Analysis Jan 24: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XLM, ADA

Source Cointelegraph

Travel Platform Travala Expands Payment Options With XEM

Travala, a service that lets its users pay for hotel stays with digital currency, has expanded its crypto payment options by adding support of NEM (XEM) tokens.

The NEM Foundation and announced the integration of XEM with the travel company’s platform, according to a blog post published by Travala on Jan. 22. As such, XEM joined over 20 other digital currencies supported by Travala’s platform, including Bitcoin (BTC), Ether (ETH), Tron (TRX), stablecoin Tether (USDT), privacy-focused token Monero (XMR) and others.

Boost in revenue

The move comes in the wake of Travala’s announcement that it began accepting USDT as a valid form of payment at its two million linked properties.

In November 2019, Travala entered a partnership with, purportedly allowing users to book 90,000 different destinations using cryptocurrencies. Travala’s CEO Matt Luczynski commented at the time:

“This partnership allows our users to access’s accommodation listings, as well as the listings from several other leading travel suppliers, which is a fantastic use case for our own AVA token and another huge step towards mass cryptocurrency adoption.”

Following the partnership, Travala saw its revenue for the month of December go up by over 33.5% month-on-month. Over 9% of December’s bookings were paid in Travala’s proprietary token, AVA. Furthermore, 28% of them were paid in BTC, 8% in Bitcoin Cash (BCH), 37% with credit card and PayPal, while the rest with other crypto assets.

Travala told Cointelegraph that the most used digital currency on the platform has been Bitcoin so far, and the proportion of customers who pay with cryptocurrencies has surpassed 60%. 

Challenges and benefits

Elaborating further on the challenges Travala has faced after it began accepting crypto as a payment option, the company commented:

“Due to the nature of the hotel industry prices can change rapidly so we have a small time window to receive payments and process the bookings. We solved this by processing bookings on confirming status instead of waiting for full confirmations. This is especially important when accepting Bitcoin payments.”

Travala also named refundable bookings with crypto payments as one of the challenges, due to volatility. As such, the company decided to make refunds for refundable bookings made with crypto in stablecoins. 

At the same time, Travala has ostensibly seen much higher-than-industry-average bookings made with digital currencies. “It is refreshing to know that each time we take a booking with cryptocurrency payments we avoid all the normal issues with traditional payment methods such as fraudulent payments and bad actor disputes,” Travala said.

Crypto in tourism

Crypto’s spread into the travel industry is not confined to hotels alone. Last December, news broke that Thailand was going to apply blockchain to its Electronic Visa On Arrival (eVOA). The objective of the initiative is to speed up and protect the digital visa application process and will soon be available for five million visitors from 20 countries.

Alternative Airlines, a travel company based in the United Kingdom, partnered with cryptocurrency service Utrust to facilitate payments with crypto. As of last November, the two companies planned to provide customers with the ability to book flights while paying with crypto such as BTC, ETH, Dash, DigiByte (DGB) and Utrust’s native token UTK.

Source Cointelegraph

WEF Unveils Global Governance Consortium for Digital Currencies

The World Economic Forum (WEF) has created what it claims is the first ever global consortium dedicated to designing a framework for the transnational governance of digital currencies, including stablecoins.

A press release shared with Cointelegraph on Jan. 24 reveals that the newly-formed Global Consortium for Digital Currency Governance will focus on the development of interoperable, transparent and inclusive policy approaches to regulating the digital currency space and fostering public-private collaboration in both developed and emerging economies.

Tackling fragmentation 

The WEF says the impetus for the consortium’s creation is a recognition that well-designed global governance remains the key to realizing the much-lauded promise of digital currencies to foster financial inclusion by extending access to financial services to un- and underbanked populations globally. 

The consortium will convene international enterprises, traditional financial institutions, government representatives, technical experts, academics, international organizations, NGOs and members of the WEF’s communities.

Alluding to the presently fragmented state of global digital currency regulation, the WEF says that it will focus on building trust and encourage innovative thinking on regulatory policies that can support public and private actors in the global digital currency space.

A host of high-profile figures have endorsed the initiative, including the Governor of the Bank of England, Mark Carney, WEF founder and executive chairman Klaus Schwab, the Senior Minister and Chairman of the Monetary Authority of Singapore, Tharman Shanmugaratnam, and finance ministry officials and central bankers from Egypt and Bahrain. 

Neha Narula, director of the Digital Currency Initiative at the Massachusetts Institute of Technology has said that “Creating an inclusive, integrated global digital currency system requires dialogue across stakeholders ranging from finance ministers to open source developers.”

Cryptocurrency industry members, among them Consensys’ Joe Lubin, Calibra’s David Marcus and BitPesa’s Elizabeth Rossiello have also their pledged support for the WEF consortium, the latter saying she hopes that shared expertise will help pave the way for “truly global policy recommendations.”

Crypto at the WEF

This week’s WEF meeting at Davos has seen plenty of positive engagement with the present and future role of digital currencies in global finance. 

On Jan. 22, the WEF and several major central banks released a central bank digital currency (CBDC) policymaker toolkit tailored to fostering further study of three categories of CDBC development: retail, wholesale and hybrid.

Source Cointelegraph

Ripple CEO Hints at IPO, Says More Crypto Firms Will Go Public in 2020

Ripple CEO Brad Garlinghouse predicts that initial public offerings (IPOs) will become more prevalent in the cryptocurrency and blockchain space in 2020.

Speaking at the World Economic Forum in Davos yesterday, Jan. 23, Garlinghouse reportedly hinted that Ripple would itself be one of those firms to seek a public flotation:

“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company.”

“Natural evolution”

An IPO refers to the process of offering the shares of a private corporation to the public in a new stock issuance. For this reason, it is sometimes referred to as “going public,” or as “floating” corporate shares to the wider market.

The cryptocurrency industry has to date focused its energies on initial coin offerings (ICO), which evolved as an alternative issuance model for still-young, innovative firms that spared them many of the cumbersome legal and regulatory processes involved in a traditional IPO.

Yet as the space matures — and arguably, in the wake of the post-boom ICO rout, which saw many offerings exposed as either outright fraudulent or simply unsuccessful — some firms are now seeking to build confidence with mainstream investors by way of public listings on traditional stock exchanges, with all of the red tape and financial disclosures that implies.

This is a trend that Garlinghouse appears to believe will consolidate itself in the near future, even as some of the industry’s largest players have thus far struggled to meet the stringent requirements of an IPO. 

As an alternative to adopting a traditional flotation model, major crypto firms such as Blockstack have instead chosen to pursue compliant token sales, with the approval of the United States Securities and Exchange Commission.

Silvergate Bank — a California-based commercial bank focused on digital currency businesses — went public with an IPO on the New York Stock Exchange in Nov. 2019.

Source Cointelegraph

Ripple’s XRP Sales Saw a Historic Low in Fourth Quarter of 2019

Ripple’s XRP sales continued to drop in the second half of 2019, with sales of the token reaching a historic low in Q4.

According to a Jan. 22 blog post by Ripple — the firm behind the third largest crypto asset by market cap — total XRP sales in Q4 2019 accounted for $13.08 million, down more than 80% from the $66.24 million reported in Q3 2019.

Ripple got rid of programmatic sales 

The massive decline in XRP sales in 2019 does not appear to be unexpected though. Specifically, quarterly XRP sales were consecutively dropping in 2019 as Ripple initiated the pause of programmatic sales in mid-2019. Announcing the plans in June, Ripple was expecting that XRP sales would would fall significantly:

“In the short term, this means Ripple’s sales of XRP in Q2 2019 will be substantively lower (as a percentage of reported volume) than in the previous quarter—with our stated target of 20bps for programmatic sales of XRP volume, as reported by CoinMarketCap, likely dropping to less than 10bps. Longer term, by being more demanding about our expected standards for market structure and reporting, we hope to begin raising the bar industry-wide.”

As Ripple started to reduce the amount of programmatic sales in Q3, the company subsequently saw a notable decline of total XRP sales.

In Q2 2019, Ripple’s programmatic sales accounted for nearly 60% of XRP sales that quarter, at $144 million out of the $251 million total. In Q3, programmatic sales comprised 25% of total token sales, weighing in at over $66 million.

Finally, Q4 2019 appears to be the first quarter when Ripple has finally got rid of programmatic sales altogether, focusing solely on over-the-counter (OTC) sales. As such, total XRP sales in Q4 2019 only included OTC sales or institutional direct sales.

XRP sales in Q3 and Q4 2019

XRP sales in Q3 and Q4 2019. Source: Ripple

What are programmatic sales and why did Ripple decide to pause them?

While Ripple does not explicitly define the term of a programmatic sale on its website, the company notes that such sales are associated with passive trade execution. The company purportedly decided to temporarily pause its programmatic sales as part of their effort to address the issue of misreported trading volumes on cryptocurrency markets. Ripple wrote in July 2019:

“Ripple’s programmatic XRP sales have been done with the goal of minimizing market impact. The company did this through limiting XRP programmatic sales to what it considers a small percentage of traded volume, which was executed across multiple exchanges. Ripple relies on programmatic sales partners who mainly execute trades passively; their trading volumes do not vary based on changes in the price of XRP, but they do increase as overall XRP trading volumes increase.”

As part of the initiative, Ripple also shifted to a “more conservative volume benchmark” for XRP sales, moving away from CoinMarketCap to CryptoCompare Top Tier.

Cointelegraph has reached out to Ripple for commenting on its decision to eliminate programmatic sales, but has not received a response as of press time. This story will be updated should they respond.

Ripple called 2019 its strongest year of growth 

The XRP price was also decreasing in 2019, dropping 42% from $0.364 on Jan. 1, 2019 to $0.183 in December, marking a two-year low. 

The situation has been intensified by growing concerns over the unclear regulatory status of XRP after Ripple faced a class-action lawsuit alleging that it held an unregistered sale of securities. 

On Jan. 13, the chairman of Commodity Futures Trading Commission said that the status of XRP is still unclear, while expressing confidence that Bitcoin (BTC) and Ether (ETH) are commodities. On top of that, the Coinbase-backed Crypto Ratings Council, a group of major United States’ cryptocurrency firms seeking regulatory clarity, believes that XRP is likely to be a security, based on its rankings for digital assets.

At press time, XRP is trading at $0.219, down nearly 4% over the past 24 hours, following a major downward trend on markets.

Source Cointelegraph