Coinbase and Ripple Execs Unveil Master Plan to Drive US Crypto Adoption

Two executives at Coinbase and Ripple are leading a push for smart regulations and transparency in the crypto-sphere that would arguably drive adoption and take blockchain technology mainstream. 

Market integrity must improve

The Market Integrity Working Group’s co-chairs want regulators to grasp how they can advance the cryptocurrency industry. In an official company statement, Coinbase senior director and associate general counsel Rachel Nelson, in conjunction with Ripple’s head of global institutional markets Breanne Madigan, wrote

“To improve market integrity and provide consumers the confidence they deserve, Congress may need to enact legislation to support the orderly and secure functioning of crypto markets.”

Projecting wider regulations, they added: 

“Such legislation could expand the Commodity Futures Trading Commission’s (CFTC) authority to include the regulation and oversight of digital commodity exchange markets.”

The need for a regulatory framework

The Working Group, which officially launched on Jan. 23 2020, outlined the problems that saddle exchanges. According to this organization, state-specific regulations are to blame: 

“Consumers and cryptocurrency exchanges deserve a clear regulatory framework, the establishment of which would ultimately enhance market integrity and drive consumer adoption of cryptocurrencies.”

The co-chairs argue that new exchanges face byzantine burdens while existing exchanges struggle against compliance requirements. But a regulatory framework would bolster market integrity and encourage consumer adoption of cryptocurrencies.

Source Cointelegraph

Davos 2020: Awaited Regulations, Unexpected Enthusiasm, New Challenges

Davos 2020: Awaited Regulations, Unexpected Enthusiasm, New Challenges

Source Cointelegraph

Payments Startup Raises $80M From SBI Group, Visa Invest and Others

Cross-border payments platform Currencycloud has raised $80 million in funding from SBI Group, Visa and other investors.

Per a Jan. 27 press release, London-based Currencycloud secured $80 million from SBI Group, Visa, International Finance Corporation, BNP Paribas and Siam Commercial Bank. Following the investment, Colleen Ostrowski, senior vice president and treasurer of Visa Inc, will join the board of Currencycloud.

By its own account, the startup — which provides embedded B2B cross-border payments — is going to allocate the raised funds for its further growth, expansion of its portfolio of emerging payment methods and development of its partner ecosystem. Currencycloud also intends to integrate with major software platforms and begin support of alternate payment methods such as mobile wallets, instant payments and cards.

SBI’s interest in crypto projects

SBI Group — one of the major investors in Currencycloud — has actively pursued partnerships and initiatives across the blockchain and cryptocurrency industry.

In late December 2020, SBI cooperated with Germany’s second-largest stock exchange Boerse Stuttgart Group to promote the adoption of digital assets. Specifically, SBI planned to invest an undisclosed amount in two digital asset-focused subsidiaries of Boerse Stuttgart Group — Boerse Stuttgart Digital Exchange and Boerse Stuttgart Digital Ventures.

That same month, SBI Holdings was considering paying shareholder dividends in the form of XRP tokens, following the same practice by its subsidiary MorningStar. SBI would launch the program during the fiscal year ending in March 2020, with Kitao further stating that it is opt-in.

Other recent investments

Payments behemoth Visa acquired financial technology firm Plaid for $5.3 billion. Plaid developed a network that allows users to easily connect their financial accounts to the apps they use to manage their financial lives.

January has seen an array of industry-related investments so far, with TaxBit, a crypto-oriented tax compliance firm, raised $5 million in a seed round that had seen participation from the Winklevoss twins’ family office, Winklevoss Capital, and major crypto exchange Binance invested an undisclosed sum in blockchain data monetization startup Numbers.

Source Cointelegraph

Russian State-Run Tech Firm to Decrease Spending on Blockchain by 50%

Russian government-backed corporation Rostec intends to cut spendings on the blockchain development in the country by at least 50%.

According to Rostec’s roadmap, the organization is planning to spend 28.4 billion rubles ($453.2 million) on the development of blockchain technologies in Russia by 2024, instead of initial 55 billion ($877.8 million) to 85 billion rubles ($1.3 billion). The news was reported by domestic news outlet Kommersant on Jan. 27.

The corporation detailed that the introduction of blockchain tech into the product labeling system will require 650 million rubles ($10.3 million), into healthcare system 1.17 billion rubles ($18.6 million), of which 575 million rubles ($9.1 million) will be allocated to the tracking system of counterfeit and pharmaceuticals consumption. The implementation of blockchain in the housing and utility services will ostensibly require 475 million rubles ($7.5 million).

Revision of blockchain’s potential effect on economy

Rostec has revised their assessment of the potential direct and indirect economic effect of blockchain development in the country, whereas earlier versions of the roadmap suggested significantly larger investments in the technology. The downgraded forecast of the economic effect is ostensibly connected to the change in the macroeconomic situation.

Rostec’s spokesperson stipulated that currently there is a change in the perception of the technology, “a self-cleaning of the market from copy projects that do not have a development strategy and a certain market niche,” while the Russian market in these conditions is developing most smoothly and is choosing the path of “less risky development.”

The corporation has sent the document to the Ministry of Communications and the Analytical Center for the government of Russia for approval.

Russia’s turn to blockchain

Worth noting, the move comes in the wake of the appointment of the new Prime Minister of the Russian Federation, Mikhail Mishustin, who called on the country to prioritize development of the digital economy.

In the meantime, Russia has implemented a number of blockchain projects in various sectors. Last December, Russia’s national energy grid operator Rosetti began testing a blockchain solution for payments in the retail electricity sector. The project aims to automate and make transactions between energy producers, suppliers and consumers more transparent.

The country’s mining and smelting giant Nornickel also commenced testing its platform for digital metal tokens in collaboration with physical commodities trading group Trafigura Group Ltd., metals finance and logistics firm Traxys SA and materials technology and recycling group Umicore SA.

Source Cointelegraph

Major Swiss Banking Firm Julius Baer Launches Services for Cryptocurrencies

Major Swiss private banking and wealth management group Julius Baer has launched a digital assets trading and custodial service via a partnership with regulated crypto-specialist Seba.

Julius Baer announced its new digital assets offering on Jan. 21, the result of its 2018 minority equity stake acquisition and later partnership with crypto startup Seba Bank AG in February 2019. 

Seba, which was founded in April 2018 by former UBS bankers, was granted a securities dealer and banking license by the Swiss Financial Market Supervisory Authority, known as FINMA, in August 2019.

According to Julius Baer’s announcement, the firm’s entry into the cryptocurrency industry had been conditional upon Seba’s attaining the regulatory green-light for its services. 

Firm sees increasing demand for crypto services

Though details of the scope of Julius Baer’s offering remain scant, the firm’s announcement indicates it will make use of Seba’s proprietary platform and capabilities. 

To meet what it deems to be an increasing demand, Julius Baer will be offering its clients services such as secure digital asset custody, cryptocurrency transaction solutions, as well as consolidated portfolio overviews for both traditional and digital assets. 

The bank will support a select group of major cryptocurrencies ostensibly chosen on the grounds of their liquidity, security and technical robustness. Julius Baer has not disclosed which assets exactly it will be offering.

Fully-regulated market entrants

As reported, Seba was granted its FINMA license the same day as fellow Swiss digital asset bank Sygnum.

In December 2019, SEBA expanded its services to institutional clients and accredited investors in nine new countries. 

The bank offers a range of crypto-focused account services, including a SEBAwallet app, e-banking services and SEBA card facilities, with support for five major cryptocurrencies: Bitcoin (BTC), Ether (ETH), Stellar (XLM), Litecoin (LTC) and Ether Classic (ETC). 

It also provides investors with both crypto-crypto and crypto-fiat conversion services and offers enterprise accounts for blockchain firms and their employees.

Like Seba, Sygnum is eyeing global expansion and has ostensibly entered talks with regulators to seal a banking license in Singapore.

In fall 2019, Cointelegraph reported on remarks by Christian Gattiker-Ericsson — Julius Baer’s chief strategist and head of research and investment solutions — who argued that cryptocurrencies remain at a stage of a “Darwinian” process of selection, in which a clear winner remains to be established. 

Gattiker-Ericsson also said blockchain technology would  “possibly change the rules of the game” in financial services.

Source Cointelegraph

Over 700 Blockchain Firms Founded This Month in China, Over 26,000 In Operation

Chinese entrepreneurs registered 714 blockchain firms in China this month, resulting in a total of 26,089 such companies operating in the country.

According to cryptocurrency data firm LongHash on Jan. 26, the total number of blockchain firms registered in China is 79,556, while 57,257 Chinese blockchain firms also lost their legal status or had their licenses revoked. 

From 2009–17, the annual number of founded blockchain firms remained relatively static, before a notable jump upward in 2018.

While it remains to be seen whether funding remains stable for the remaining 11 months of 2020, if the average monthly rate of founded blockchain firms remains the same as in January, China would see 8,565 new blockchain-related companies this year.

Blockchain firms registered in China per year

Blockchain firms registered in China per year. Source: LongHash

As per the map below, the lion’s share, 28.5%, of blockchain firms in China are in the province of Guangdong, which is home to the major city of Shenzhen and shares a border with Hong Kong. Both of these cities are known for their tech hubs and initiatives to apply blockchain in civil administration and other aspects of municipal development.

Distribution of registered blockchain firms in China

Distribution of registered blockchain firms in China. Source: LongHash

Average funding remains low 

The data also reveals that over 46% of Chinese blockchain firms have no more than 5,000 yuan of registered capital, which is equivalent to just under $721. Furthermore, 8.32% of firms have between $721 and $1,442, 26% have between $1,442 and $7,208, while 9.17% of firms have $7,208 or more. 

This apparent lack of capital in the Chinese blockchain space is in line with the results of a recent joint study by China’s government-run financial information and media firm Xinhua and financial data platform Rhino Data. The study states that investment and financing deals in the Chinese blockchain space dropped over 40% in 2019.

China’s official blockchain development efforts

As Cointelegraph reported in October 2019, Chinese President Xi Jinping called for the country to accelerate its adoption of blockchain technology:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”

After the announcement, reports suggested that blockchain technology was rapidly maturing in China as it is increasingly implemented in government projects. The consequences of Jinping’s talk are far-reaching, as some noticed that reports criticizing blockchain technology are now banned from local media.

Source Cointelegraph

The Decade of the Consumer–Citizen Governance Dilemma

The health of a democratic nation’s currency is shaped by two forces: monetary policy, set by its Central Bank; and fiscal policy, set by the state’s ruling government. The thrust of it is that currency and politics are bound together, whether we like it or not. But that’s old news.

Citizens of the cryptosphere are already aware of this, as many members of the community will have been drawn to crypto through dissatisfaction with the governance of modern currencies and the sway that politics has over it. At the very least, we recognize it — and are making choices to hedge our exposure to it.

National politics is increasingly unstable ground — with the political landscape globally colored by polarized opinions. More and more, elections the world over are resulting in coalition governments since no one party receives the majority consensus. Issues such as Brexit — or the incredibly close results in the last United States presidential elections — are demonstrating the deepening divide in opinions, resulting in governments stagnating or acting against the will of a considerable portion of the voting populace.

These are no firm foundations for the money that powers the lives of a nation state’s citizen. Through the powers of technology, we are now global citizens and global consumers. Yet, our global identities are tethered to and restricted by our default currency — that of our home nation-state. Take the British pound — the currency of nearly 68 million people, for example. On the announcement of the Brexit vote result back in 2016, the value of the pound plummeted — a drop, from which the currency has not yet fully recovered. Regardless of whether or not you voted for or against the United Kingdom’s exit from the European Union — the weight this sudden depreciation put on the wallets of the public was the same.

Though it is only January, we’ve already seen rising levels of political turmoil in 2020 — such as the escalating tensions between the U.S. and Iran, weighing on a historically tense political backdrop in the Middle East and garnering concern from leaders globally — how can currency, and its value for holders, sustainably play out against an unstable political backdrop over the next decade? We see three forks in the road ahead of us.

Central banks taking the reins

We have already seen a number of central banks gear up to move into the cryptocurrency space. Appearing to lead the charge are the central banks of authoritarian countries Russia and China, whose initiatives have been making headlines for some time. Central banks of nation-states across the Eurozone have taken middling stances — indicating that, while they are investigating the application of the technology, we are unlikely to see them rolling out their own any time soon.

Related: The Financial System of the Future — Who Benefits From CBDCs?

But, let’s say, for argument’s sake, that over the next decade, central banks rollout the digital iteration of their respective currencies. While this may seem like the most logical progression, there are two sides to the digital coin: A central bank-issued digital currency has built-in acceptability but does not address the challenges of paper currency.

What’s more, this digital national currency is still subject to fiscal policy set by the government, as well as to the challenges of a nation whose consensus is increasingly divided. This scenario is not sustainable for the same reasons as non-digital national currencies.

Corporates take the lead

Another scenario is that digital currency initiatives led by corporations come to the fore. This would feasibly insulate the purchasing power of a given currency holder against government agendas and central bank policies since the governance of such a currency would be the prerogative of the corporation.

Related: Libra Seen as Threat to National Currency Sovereignty, Pleads With G-7

Yet, this may be a case of jumping out of the frying pan into the fire. Corporates are essentially governed by their shareholders, or by the executive board who are trusted to act in line with the shareholders’ values. While this means that decision making on issues of governance could be more efficient, we must consider that shareholder values generally tend more toward profit.

Of course, this is entirely sound for a business — but currencies should not be seen as a business opportunity. If a corporation were to produce and implement a new currency, whose direction is decided in line with shareholder values, we would essentially be returning to the fiscal governance of pre-democracy. In this instance, decisions would be made by an elite ruling class, exposing consumer purchasing power to an agenda set to turn a profit for a select few.

A technological change of tact 

In my mind, there is no doubt that technology will factor into the future of currency: Technology has already become intertwined with most aspects of modern life. When it comes to money and accounting, technology can offer huge value through its agility, security and automatic, immutable record-keeping.

The consumer citizen governance dilemma is really a question of purchasing power — and how much of the purchasing power of a currency should be subject to governance according to political or corporate agendas. Of course, identifying this as a challenge is diagnostic — and a diagnosis is not a solution. But here is where the case for technology becomes especially compelling.

Applied correctly, technology can allow currency holders to set the agenda for the governance of their money. So, instead of peripheral factors — such as public sentiment or a given government’s spending agenda — shaping the health of a currency, individuals could have a democratic say in how they want the currency they hold to be governed. This type of monetary democracy is unprecedented — because until technology revealed the building blocks, it would not have been possible.

Now, it is. With the help of blockchain technology and a ground-up approach to building out issuance and governance policies, we can build a currency that doesn’t rely on a national or corporate entity for issuance. Instead, the crucial functions controlling the money supply can be based on predefined rules and algorithms — offering built-in transparency and reliability, and assurance that these functions are carried out as intended. Since this is not limited by geography nor borders — it could function as a true global currency, accessible to anyone with an internet connection.

The crux of the issue is this: There is a growing need for a global currency that is not a by-product of national politics. In our view, a currency’s governance should take the will of its holders into a direct account. Especially as we, on an individual level, engage more and more with global goods and services — national currencies are increasingly demonstrating that they are unsuited for the needs of modern citizens on the global level. National currencies tend to meet their needs of national economies — they are designed for this. It makes sense that a global economy needs a tailored currency that would accommodate its needs. Modern technology allows users of a currency to become real decision makers; thus, a global digital currency — that will unite all humanity and serve the needs of the users without political interference — is the most compelling parth forward that I can imagine.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ido Sadeh Man has spent the last 10 years leading product and technology organizations, including both Odysii and Mobli, Considering blockchain as one of the required set of tools for creating updated governance structures for the data-era citizen, Ido has founded an applied research project within Saga the New Contract Policy Institute. The project contributes to the process of defining a new paradigm for a coherent social exchange of value — i.e., an updated social contract.

Source Cointelegraph

Digital Courts Trial Decentralized Justice, Real World Weighs Verdict

Imagine a future where conflicts and legal disputes are no longer settled between the four walls of a courtroom but by anonymous jurors of a blockchain network. The concept seems far-fetched, but it is already a reality as a result of some forward-thinking projects that are using the power of decentralized smart contracts and participants that are incentivized to make rulings as jurors.

Kleros, a blockchain dispute resolution system, is already operational, and it has sparked heavy debate around blockchain technology and its application in the legal space. In February, Kleros will be joined by another platform with its own dispute-resolving platform — Aragon Court.

The decentralized court falls under the umbrella of Aragon Association’s decentralized platform that enables users to create a variety of organizations and companies. Users can manage a variety of aspects of an organization, from management to voting and finance.

The premise and purpose of Aragon Court is intriguing, as it has the potential to become a borderless dispute resolution tool that transcends the jurisdictions of different nations and laws. What remains to be seen is whether the judgements made by jurors of the platform can be enforced and if they hold weight in the eyes of conventional legal systems and courts.

How it works?

Such court platforms work under a protocol handling subjective disputes that cannot be automatically settled by smart contracts. The protocol makes use of human jurors who vote on a specific dispute in order to reach a final ruling.

For example, to become a juror on the Aragon Court, a user is required to sign up, stake and activate ANJ, which is the platform’s native token. The likelihood of being drafted is increased proportionally by the amount of ANJ that a juror has activated.

Once jurors have been called to rule in a dispute, they enter the voting phase of the protocol’s process. The Aragon Court uses a game theory method known as a Schelling Game in order to provide a subjective outcome to the dispute. Jurors are asked to vote on a ruling that other jurors in the dispute are most likely to vote on as well.

As previously mentioned, a portion of jurors’ ANJ tokens are locked in a pool until a verdict is reached. With the objective being the consensus of an outcome, jurors that opt for the minority ruling lose their staked tokens. Alternatively, jurors that vote with the majority are rewarded a share of the staked tokens as well as ruling fees from the protocol.

Parties involved in the dispute are able to appeal the outcome of a ruling by staking more collateral for a proceeding round of adjudication. This preliminary round will require new jurors to vote on a new ruling. This process can happen multiple times if subsequent findings are appealed. The smart contract that initiated the dispute can then be settled in accordance with the final ruling of the voting jurors.

A viable alternative to traditional courts?

Aragon Court’s dependence on game theory and consensus leads to some interesting questions around the viability of the platform becoming an alternative for various disputes to be settled outside of traditional courts.

Unlike a conventional trial jury that will hear evidence and deliberate over the outcome of a court case among its members, Aragon Court’s jurors do not have any lines of communication with each other. They vote on the given outcomes of a dispute and are directly incentivized to vote for the outcome that other jurors are most inclined to select.

Cointelegraph reached out to United States-based corporate lawyer Dean Steinbeck for a legal perspective on the potential of digital courts like Aragon. As Steinbeck explains, the nature of the game theory mechanism is one that has been considered for many years for a host of different applications. However, the mechanism may not lead to an outcome that delivers justice in a conventional sense:

“On the one hand, skin in the game ensures that jurors make rational decisions. […] On the other hand, jurors will not vote based on what they think is right, but based on what they think the majority of jurors will think is right. So there could be a situation where a juror has a strong conviction of something but is afraid to vote for it because he or she might lose money. The safest bet will always be to vote with what you think is the majority decision. Ultimately, that’s not justice but populism.”

Aside from the mechanism of voting, Aragon Court potentially offers a far more cost-effective mechanism of reaching an outcome than traditional legal means. Taking any dispute to a formal court of law can be a costly exercise and that provides room for viable alternatives of mediation. Steinbeck suggests that individuals, companies and online platforms may be inclined to use a service to settle disputes that are fairly menial from a legal perspective:

“I think Aragon Court looks like an efficient way to settle disputes that would otherwise be too costly to adjudicate in a court of law. However, my guess is that if enough money is at stake a litigant will still want to hire a lawyer to prepare paperwork stating his or her case. So it’s likely that lawyers, or other experts, will still be used.”

Another point of consideration is the possibility of jurors conspiring to reach an agreed outcome in order to secure a share of the rewards of a ruling. Given the way in which the Aragon Court protocol works, malicious parties could be tempted to take advantage of the game theory mechanics. Aragon Association Executive Director Luis Cuende told Cointelegraph that the voting mechanism is designed to discourage this type of behavior by jurors.

“Jurors have to vote with a mechanism called commit-and-reveal — which makes it impossible for them to have certainty of what each other will vote. Therefore they could try to cheat on each other and get fees from the ones on the losing part, so they are incentivized to not do that.”

Legally binding?

Another pertinent question surrounding the future of digital courts is whether rulings of disputes hold any weight from a formal legal standpoint. Are parties beholden to a ruling from such a court, legally speaking? Steinbeck suggests that if two parties contractually agree to have a dispute settled, the ruling will be legally binding:

“Today, third-party arbitration and mediation is a huge business. There is no reason why parties can’t contractually agree to the outcome of an Aragon Court ruling. When parties agree to adjudicate their disputes via Aragon, those decisions will be binding.”

As a signal of intent, the Aragon Association has done just that in a contractual document between itself and an ongoing development, as Cuende explains:

“You can also use traditional legal agreements and set Aragon Court as the dispute resolution mechanism — we have actually done that for one of our grants to the team developing Aragon Chain.”

While Steinbeck considers such a legal contract as binding, Cuende believes that a ruling by a traditional court may be what is needed to give credence to the Aragon Court, “The true test of this would be a case convened in the Aragon Court being taken to a conventional court.”

What about the jurors?

A dispute resolution mechanism like Aragon Court does not require jurors to have any formal legal qualifications or background. It is an interesting premise, given the fact that jurors could be involved in making decisions in complicated disputes. Their involvement as jurors is solely determined by their stake of tokens in the platform.

Related: Blockchain Startups Think Justice Can Be Decentralized, but the Jury Is Still Out – Magazine by Cointelegraph

While Steinbeck suggests that knowledge of legal systems and law is not imperative for jurors, the lawyer thinks enforcing jurors to meet certain criteria might make the system more acceptable to prospective users:

“I don’t think jurors need a legal background, but some level of sophistication is desirable. I think imposing certain age, educational and/or professional qualifications would let users feel more comfortable with the decision making process.”

On the other hand, Cuende insists that the “magic” of the blockchain-powered court is provided by the incentives of consensus, “Anonymous Internet miners secure your Bitcoin, and anonymous Internet people secure your legal certainty — all thanks to crypto economic incentives.”

Jurors still need to be able to make sense of the contractual parameters of a dispute as well as the evidence given. The complexity of some cases and questions around the authenticity of evidence used to dispute claims add another dimension to the capabilities of the blockchain-based court systems.

Additionally, Cuende concedes that some disputes may not be able to be settled by Aragon Court at this stage in its development:

“For some evidence, it’s straightforward. Let’s say you want to claim a reimbursement for a flight — then it’s trivial to check if the flight was delayed. For more subjective things, especially those that may need physical interaction, it gets way harder, and those cases may not be adequate for Aragon Court just yet.”

A waiting game

Aragon Court began the process of onboarding jurors earlier this month ahead of the proposed launch of the platform in February 2020. It seems unlikely that major legal disputes will be settled through the Aragon Court in the short term. Cuende went as far as advising against it until the platform is up and working smoothly.

From a legal perspective, Steinbeck believes that it will take a considerable amount of time before businesses and institutions look to platforms like Aragon Court to preside over contractual disputes. He also argued that for now, the size of a dispute makes no difference to how these platforms operate. He also went on to summarize:

“However, I don’t see parties with millions at stake voluntarily submitting to Aragon Court in the near future. The system is so novel. It will take decades for enterprises to get comfortable with the idea of decentralized jurisprudence based on sophisticated game theory.”

Source Cointelegraph

Telegram Attacks Apple, Musk on Crypto, WEF Debrief: Hodler’s Digest, Jan 20–26

Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

World Economic Forum debuts framework for central bank digital currency

It was a c-c-c-cold week in Davos, but Cointelegraph’s reporters wrapped up warm to bring you all the news from the World Economic Forum. One particularly big announcement saw the WEF unveil a central bank digital currency policymaker toolkit. The framework, created in tandem with central banks, is designed to help policymakers understand whether deploying a CBDC would be advantageous. In other developments, a global consortium has been formed to focus on developing interoperable, transparent and inclusive policy approaches to regulating digital currencies. At the start of the week, the European Union and five major central banks — the United Kingdom, Japan, Canada, Sweden and Switzerland — announced they were planning to team up on their research for CBDCs.

WEF: Facebook’s Libra pushed world to reconsider USD as global reserve currency

Elsewhere in the snowy hills of Davos, global economists begrudgingly admitted that Libra had played an instrumental role in getting the world to evaluate CBDCs — and to challenge the U.S. dollar’s role as an anchor currency. On a panel exploring the issue, Brazil’s Economy Minister Paulo Guedes said new technologies like blockchain are paving the way for future currencies to be digital. Others, such as the International Monetary Fund’s chief economist, Gita Gopinath, cautioned that the dollar still remains attractive because it “provides the best stability and safety.” David Marcus, the head of Facebook’s Calibra wallet, was speaking at another WEF panel. He questioned whether “wholesale” CBDCs would solve any problems in the global economy, and argued that a retail-focused approach is the best way to tackle an “unacceptable” situation where 1.7 billion people are unbanked and another 1 billion underserved. Whether Libra will be that solution remains to be seen.

WEF: Ripple CEO hints at IPO, says more crypto firms will go public in 2020

And we’ve just got time for one final morsel of gossip from Davos. Ripple CEO Brad Garlinghouse has predicted that initial public offerings will become more prevalent in the cryptocurrency and blockchain space in 2020 — and he hinted his company would be among those seeking a public flotation. “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,” he said. Such a move could be instrumental in building confidence with mainstream investors and secure a pivot away from controversial initial coin offerings, which have seen young startups suffer often expensive run-ins with regulators such as the U.S. Securities and Exchange Commission.

Picture 1

Tether launches gold-backed stablecoin and begins trading on Bitfinex

Of course, plenty of news has been happening away from Davos. Tether has announced it is now supporting a gold-backed stablecoin, where one token represents ownership of a troy ounce of physical gold. The funds are said to be backed by physical gold held in a “Switzerland vault” — and the product is available as an ERC-20 token on the Ethereum blockchain, as well as a TRC-20 token on Tron. Plans for commodity-backed Tethers have been in place for some time, but the company has often been criticized for its opaque approach to reserve management. A high-profile class-action lawsuit recently accused the company of market manipulation in 2017. Tether reserves were also allegedly used to cover a liquidity shortfall.

Elon Musk reveals his true opinion on Bitcoin and crypto

Tesla’s CEO may be constantly cryptic on his attitudes toward crypto, but this week, we got a little insight into Elon Musk’s thinking. On a podcast, the billionaire said he’s “neither here nor there on Bitcoin,” acknowledged Satoshi’s white paper was “pretty clever,” and warned his stance on cryptocurrencies often “gets the crypto people angry.” Musk added: “You must have a legal to illegal bridge. So, where I see crypto is effectively as a replacement for cash. I do not see crypto being the primary database [for transactions].” Musk has been known to write short tweets about crypto that were widely interpreted as jokes. Last year, he unexpectedly declared himself as the new CEO of Dogecoin — a gesture that helped the joke coin clock short-lived gains of 35%.

Winners and Losers

At the end of the week, Bitcoin is at $8,450.74, Ether at $163.88 and XRP at $0.22. The total market cap is at $233,388,704,913.

Among the biggest 1,000 cryptocurrencies, the top three altcoin gainers of the week are Polybius, Prometheus and Eureka Coin. The top three altcoin losers of the week are Q DAO Governance, OVCODE and CannabisCoin.

Picture 2

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“I think there’s a lot of things that are illegal that shouldn’t be illegal. I think that sometimes governments just have too many laws about the missions that they should have, and shouldn’t have so many things that are illegal.”

Elon Musk, Tesla CEO

“So then there is the new technology, the digital, the blockchain. […] The Libra episode is just evoking a future digital currency.”

Paulo Guedes, Brazil’s economy minister

“When we started this journey almost six months ago, the whole idea was not around a certain way of doing things, but more around ‘let’s come together and try to figure out how we solve a problem that is unacceptable’ — 1.7 billion people who are currently unbanked, another billion underserved.”

David Marcus, Calibra CEO

“Given the critical roles central banks play in the global economy, any central bank digital currency implementation, including potentially with blockchain technology, will have a profound impact domestically and internationally.”

Sheila Warren, World Economic Forum head of blockchain

“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.”

Brad Garlinghouse, Ripple CEO

“My #Bitcoin mystery is solved. I mistook my pin for my password. When Blockchain updated their app I got logged out. I [tried] logging back in using my pin, which was the only ‘password’ I had ever known or used. I also never had a copy of my seed phrase. Honest but costly mistake!”

Peter Schiff, crypto skeptic and gold bug

“iCloud is now officially a surveillance tool. Apps that are relying on it to store your private messages (such as WhatsApp) are part of the problem.”

Pavel Durov, Telegram founder and CEO

Picture 3

FUD of the Week

Greece extradites alleged launderer of $4 billion in BTC, Alexander Vinnik, to France

A Russian national accused of heading a group that laundered $4 billion in Bitcoin has been extradited from Greece to France. Alexander Vinnik formerly operated the now-shuttered exchange BTC-e and is believed to have a direct relationship to the infamous hack of Mt. Gox. The case has risked triggering a diplomatic row, with Russia filing several requests to bring him under its jurisdiction. Lawyers writing on behalf of Vinnik’s young children had submitted a complaint to a Greek court at the start of the week in an attempt to prevent the extradition. Reports now suggest that Vinnik is being held at a hospital in Paris. His legal representative Zoe Konstantopoulou said: “In every way the government is trying to scare him, terrorize him, in a moment of great agony, while his health has worsened.”

India’s central bank says it hasn’t banned crypto

The Reserve Bank of India has said restrictions on regulated entities offering crypto assets do not equate to an overall ban. In a document submitted to the country’s supreme court back in September, which has now been made public, the institution said: “The RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs.” All of this comes as a landmark case against the RBI concludes its second week. Hearings are set to resume on Jan. 28.

Peter Schiff bungled wallet password, solving “Bitcoin mystery”

Long-running crypto skeptic and gold bug Peter Schiff is likely to be even more skeptical after losing access to his funds. At first, he believed his wallet was corrupted — but he later found out that he mistook his PIN for his password, and he was unable to log in after an app update because he had never taken a copy of his seed phrase. Many in the crypto community have criticized Schiff for making a rookie mistake, with Binance CEO Changpeng Zhao quipping: “I can’t believe I am about to say this, but maybe ‘stay in fiat?’” In recent days, CZ has said that keeping assets on an exchange is often safer than keeping the keys themselves — but those who have fallen victims to hacks on these platforms may not be so quick to agree.

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Telegram CEO: Apple’s iCloud is “now officially a surveillance tool”

Pavel Durov, the founder and CEO of Telegram, has claimed that Apple’s cloud service iCloud is “now officially a surveillance tool.” His stinging rebuke followed reports that the tech giant dropped plans for end-to-end encryption on iCloud two years ago — apparently following complaints from the FBI. This ultimately means that backed-up texts from iMessage, WhatsApp and other encrypted services remain available to Apple employees and authorities. Telegram has been positioning itself as a global fighter for privacy — and in 2018, it refused to give Russian authorities the encryption keys to user accounts, prompting as-of-yet unfulfilled threats that the app would be blocked “in the near future.”

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Indian PM Awards Crypto App Creator as Supreme Court Deliberates on Ban

India’s Prime Minister Narendra Modi awarded young entrepreneur Harshita Arora, the developer of a cryptocurrency price tracking application, amid an ongoing battle in her home country over the status of cryptocurrency.

In a tweet on Jan. 24, Modi said that Arora’s “passion towards science, technology and human welfare are clearly visible.” She received the Bal Shakti Puraskar 2020: an award recognizing youth’s contributions in the fields of social service, innovation, bravery, sports, art and culture and scholastics.

Arora was born on Oct. 2, 2001, and “created an app to safeguard investors from scammers,” according to Modi’s tweet. Her app, Crypto Price Tracker, is a portfolio management and price tracking app.

She also worked on the “Food AI” application that identifies food in pictures, and another application that helps biologists count cells in microscope images — the aptly named “CellCount.”

The complicated situation of crypto in India

The fact that the prime minister issued an official award to a crypto-involved person is particularly interesting given the conditions for the cryptocurrency industry in the country.

As Cointelegraph recently reported, the Supreme Court of India this week listened to further hearings in the landmark case against the Reserve Bank of India’s ban on banks’ dealings with crypto-related businesses.

The case was brought to the highest court in the country by the Internet & Mobile Association of India after public and industry-led petitions against the RBI’s imposition of a blanket ban on banks’ services to crypto businesses back in April 2018, which came into effect in July of that year.

Furthermore, some lawmakers in the Indian parliament have drafted a bill that would ban cryptocurrencies in the country outright. In July 2019, a copy of a bill entitled “Banning of Cryptocurrency & Regulation of Official Digital Currencies ” leaked to the press.

The bill aims to ban any non-government digital assets and defines such assets as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”

Source Cointelegraph