Russia Leads Multinational Stablecoin Initiative

Russian President Vladimir Putin is the most influential person in the blockchain industry, according to Changpeng Zhao, the CEO of major cryptocurrency exchange Binance, which added five trading pairs: Binance Coin (BNB), Bitcoin (BTC), Ether (ETH) and XRP at the beginning of December, as well as adding Tether (USDT) later the same month against the Russian ruble.

Putin was the first to propose a multinational cryptocurrency along with the Eurasian Economic Union, or EAEU, and BRICS countries after being advised by Vitalik Buterin in the wake of the 2017 cryptocurrency bubble.

Related: Pax Crypto: Russia Proposes First Multinational Cryptocurrency, Expert Blog

With the EAEU’s Trade and Economic Cooperation with China coming into effect this year, Russia, with full support of the EAEU countries and BRICS Business Council, is seeking to establish a multinational stablecoin backed by commodities; along with BRICS pay, a cloud platform that will connect the countries’ national payment systems through a mobile payment app. Russia, India and China are planning to link national payment messaging systems, China’s CIPS and Russia’s FMSB, to accomplish this. This will be a major step on the path to dedollarization and a decoupling from the current United States-controlled global banking system, and could lay the foundation for BRICS member state integration. The Bank of Russia, the country’s central bank, has already begun testing stablecoins pegged to commodities in a regulatory sandbox. 

Related: BRICS Nations Discuss Shared Crypto to Break Away From USD and SWIFT

Digitalization is a priority

Russia is the world’s largest country. It is a leader in technology and a primary energy producer and exporter, with 80% of its economy dependent on exporting natural gas, oil — including high-sulfur fuel oil — metals and timber. 

In Soviet times, Russia’s centralized electricity plants powered many iron-curtain countries from Romania to Ukraine, and still remains an important player in the global energy system, providing 10% of global primary energy production and 16% of international energy trade. Russia ranks fourth in the world in primary electricity production, energy consumption and carbon dioxide emissions, as the country is 70% electrified by hydrocarbon energy. Russia’s CO2 emissions are almost double the G-20 average. 

Recently, Russian scientists discovered a massive fountain of methane gas — emitting up to nine times the global average — bubbling from the seafloor in the East Siberian Sea and further polluting the air. Oceans act as the largest carbon sink of our planet and host 80% of all life while providing half of the planet’s oxygen. According to the U.S. National Oceanic and Atmospheric Administration: 

“More than 90% of the warming that has happened on Earth over the past 50 years has occurred in the ocean.”

Oceans are warming at the same rate as if five Hiroshima bombs were being dropped into them every second. The Russian Natural Resources and Environment Ministry acknowledged that Russia is heating faster than the rest of the world — warming 2.5 times quicker than the planet’s average — as wildfires raged across country-size tracts of Siberian forest, followed by extreme flooding. This has contributed to the rise of sea levels from the melting of ice sheets in the Arctic, which is also warming faster than the rest of the world.  

Related: Chinese Blockchain-Based Mobile Payment Revolution: How Is the Biggest CO2 Polluter Becoming Leading World Solar Panels Producer

To diversify Russia’s hydrocarbon energy-intensive economy, President Putin signed a decree in 2018 establishing a special “Digital Economy” state program, with digital energy infrastructure mentioned as a key component. It also includes the goal to increase the share of renewable energy sources in its Energy Strategy, so that 4.5% of the total energy consumption by 2030 comes from renewable energy sources to boost science and technology development, environmental improvement, and energy supply for isolated power systems, which in turn will strengthen the economy and create new jobs. The Digital Development and Energy Ministries have also developed projects focused primarily on digitalization, regulation and coordination of the energy sector.

The expansion of the global digital economy created many new economic opportunities, with Russians behind some of the most successful digital platforms in the world. For example, Sergey Brin co-founded Google, which now has some 90% of the market for internet searches; while Vitalik Buterin co-founded Ethereum, which allows programmers to develop decentralized blockchain applications — so much so that it’s losing its scalability, resulting in very high gas fees, as slow transaction times require a substantial electricity supply for processing. In December, the Russian government said it had completed a multi-day test of a national intranet known as RuNet.

The Russian Association of Cryptocurrency and Blockchain counts over 2,000 members. Companies involved in cryptocurrency payments include Yandex, WebMoney,, Vkontakte, Odnoklassniki, QIWI/QBT, MirPay and Wex. Companies involved in cryptocurrency mining include BitRiver, Minery and Russian Mining Company, which utilize Siberian hydropower plants to metabolize electricity into money very cheaply at $0.04 per Kw/h, comparable to the solar energy prices in India, at $0.03 to $0.04 per Kw/h.

Related: Blockchain Pilot Makes Waves in Russia’s Energy Sector

Digitalization of the energy sector as a whole, and of the power sector in particular, is part of a global trend that both the EAEU and BRICS countries are involved in. According to the IEA, investments in digital technologies globally are higher than in gas-fired power generation. So far, Rosseti — Russia’s national energy grid operator — has developed a blockchain solution for payments for the retail electricity sector with tech startup Waves, recently commencing pilot testing in the regions of Kaliningrad and Sverdlovsk.

Related: Green Policy and Crypto Energy Consumption in the EU

Solar digital initiatives for power plants and waterways

Currently, solar energy utilization in Russia stands at just around 0.3%, but the plummeting solar energy costs and breakthroughs in high-efficiency solar cells could aid the transition to renewable energy use.

Last year, the Moscow-based Skolkovo Institute of Science and Technology demonstrated an organic solar cell able to withstand 6,000 gray units of gamma radiation — an achievement the institute says is a record high. Solar company Hevel is producing solar modules with an energy conversion efficiency of 22% and is behind building solar and storage into diesel power plants, hydro plants, oil and gas refineries and solar plants in EAEU countries, with green-finance funding from both the European Bank for Reconstruction and Development and the Green Climate Fund. Hevel will audit the emissions in these solar-energized facilities with the world’s first blockchain-issued green certificates.

Water pollution — which includes CO2 pollution — is also a major issue in Russia, which houses 25% of the world’s freshwater. Approximately 70% of Russia’s drinking water comes from surface water, and the remaining volume from groundwater. More than 10 million Russians currently lack access to quality drinking water, with around 35% to 60% of total reserves of drinking water not meeting sanitary standards, according to Russian regulatory bodies. This exacerbates health issues in many cities and villages across the country, with only 8% of wastewater correctly treated before being returned to the waterways.

Worsening this situation is Russia’s plans to delay complying with the International Maritime Organization’s mandate to lower marine sector emissions by over 80% by switching to lower-sulfur fuels starting on Jan. 1, 2020. The lack of compliance implies that Russia will not be auditing its huge inland waterway and deepsea fleets in Russian-controlled waters, which account for 53% of the Arctic Ocean coastline, as it unveils major plans for Arctic oil and gas drilling and shipping. “Permafrost is undergoing rapid change,” cautioned the Ocean and Cryosphere in a Changing Climate report by the Intergovernmental Panel on Climate Change. The changes threaten the “structural stability and functional capacities” of oil industry infrastructure, the authors warned.

To monitor and measure water pollution in the Kuybyshev Reservoir, the largest water reservoir in Eurasia, robotics research center Airalab Rus and the Tolyatti State University have developed a solar-and-battery energized drone boat named “Drone on the Volga” that monitors water pollution and distributes its readings through the Ethereum blockchain, including data such as the drone boat’s exact location at the time the readings were taken. Nevertheless, satellites remain a crucial and efficient instrument in providing valuable environmental data.

Related: Japan to Solarize Its Burgeoning Digital Economy, Expert Take

Solar Power Satellite (SPS) Systems

Space-based science fiction has been part of mainstream Russian literature since 1784, with Vasily Alekseyevich Lyovshin’s novel, “The Newest Voyage.” The book describes the first Russian flight to the Moon. Centuries later, on Oct. 4, 1957, Soviets ushered in the space age when the Soviet Space Agency launched the first battery-operated satellite, Sputnik 1, into an elliptical low Earth orbit from the Baikonur spaceport in Kazakhstan. From then on, the country served as the locomotive of space-age technological advancements such as the first probe to impact the Moon (1959), the first man in space (1961), and a number of other space related “firsts.” 

Russia’s Znamya SPS project began in the late 1980s and consisted of a series of orbital mirror experiments that were intended to beam solar power to Earth by reflecting sunlight to increase the length of a day, with the goal of boosting productivity in farms and cities. In 2011, Russia and India launched a scientific-educational satellite called YouthSat to study solar-terrestrial relationships. On July 14, 2017, the Russian Space Agency, Roscosmos, successfully launched Mayak satellites that focused the sun’s solar rays onto Earth. Mayak — complete with an android tracking app — circled the planet at a height of about 600 kilometers (372 miles) in a pole-to-pole, low Earth orbit.

During the Eleventh BRICS Summit in November 2019, the BRICS space agencies that are leaders in world space initiatives agreed to build a “virtual constellation of remote sensing satellites” for various applications, including environmental monitoring and natural resource management.

Related: Is US Environmental Tax Policy Hindering Solar Power to Fuel Digital Technologies?

Tax policy in Russia and Member States

Russia taxes 13% of CO2 emissions from energy use. According to an IMF report, Russia ranks number three in subsidies to the hydrocarbon industry, at $551 billion, and holds the world’s largest natural gas reserves (27% of the total). It has the second-largest volume of coal reserves and the eighth-largest volume of oil reserves. Approximately 60% of the subsidies go to natural gas, with the remainder spent on oil extraction and electricity, including renewable power generators.

Tax policy of member states

Notes: CO2 emission, gas reserve, coal reserve, oil reserve, solar energy, carbon tax, hydrocarbon subsidies


As the warmest decade on record — marked by extreme storms, deadly wildfires from Siberia to Brazil’s Amazons to Australia, and heavy flooding — came to a closure, a study stated that decarbonization of the energy sector is not yet on the horizon for Russia, which retains a skeptical attitude toward the problem of global climate change. The share of solar in the world’s energy balance is insignificant and not expected to exceed 1% by 2040, driving Hydrocarbon CO2 emissions higher and higher.

Russia ratified the Paris Agreement during the longest-ever United Nations climate summit, which ended without a deal to regulate carbon markets. The major powers, behind over 75% of global emissions, are set to miss emissions reduction goals, with the U.S. pulling out to undermine the climate pact despite developing a revolutionary solar cell technology with an efficiency of 27.3% to 32% that could trounce the energy market.

Amid European Central Bank officials urging European banks to develop a cheaper alternative to Facebook’s Libra stablecoin, which could potentially reach 2.7 billion users (35% of the world’s population), Russia is taking the lead in issuing a multinational stablecoin backed by commodities.

Russia’s cyber-initiative connects some of the most promising hydrocarbon rich economies stretching across Eurasia, Africa and South America. Separately, BRICS member states all have plans to issue central bank digital currencies as well. As a result, more than 41% of the world will be using electric energy-intensive blockchain and smart contract technology. This initiative will potentially further boost science and technology development, create new jobs, improve trade efficiency among member states by replacing other fiat currencies used in trade settlements, and create a technologically resourceful trade block. However, if such technology is fueled by hydrocarbon energy produced and heavily subsidized by member states, temperatures are expected to rise 3.2 degrees Celsius above preindustrial levels by the end of the century, according to the latest emissions gap report. Particularly in light of the fact that Russia, Brazil, China and South Africa are not on track for a 1.5-degree world.

A decisive role could be played by BRICS in finding innovative solutions to the functioning of the current global framework, particularly in transitioning to green economies. Russia’s Ministry of Economic Development recently published an action plan to mitigate risks associated with present and future climate change, citing among other things, the government’s calculation of the risk of Russian products becoming unable to compete if they fail to meet new climate-related standards. Ending subsidies for fossil fuels could reduce global emissions by between 1% and 11% by 2030, the U.N. has found. Eliminating greenhouse gases over the next 20 years could help Earth avoid between 0.3 and 0.8 degrees of warming by 2050, as research suggests. 

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.

Selva Ozelli, Esq., CPA is an international tax attorney and CPA who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.

Source Cointelegraph

New Canadian Dollar-Pegged Stablecoin QCAD to be Regulated by FinTRAC

Major Canadian investment fund manager 3iQ and blockchain firm Mavennet co-launched a new regulated stablecoin pegged to the Canadian dollar (CAD).

Developed by Canada Stablecorp, a joint venture between 3iQ and Mavennet, QCAD is the latest CAD-based stablecoin and was officially launched on Feb. 11.

QCAD total supply accounts for about 150,000 CAD at the launch

Based on the Ethereum blockchain, QCAD implements popular token standard ERC-20 and is targeting the mass market. 

While QCAD is not yet listed on major websites tracking crypto market capitalization like Coin360, QCAD transactions can be now tracked via Ethereum blockchain explorer Etherscan. According to Etherscan, QCAD is held by 5 addresses with a total supply of 150,350 CAD ($113,000) as of press time.

Following the launch, Canadians can immediately trade QCAD against major cryptocurrencies like Bitcoin (BTC), Ether (ETH) as well as USD Coin (USDC), a USD-pegged stablecoin launched jointly by Coinbase and Circle.

QCAD’s custody provided by BitGo and local crypto custody service Balance

According to the announcement, users can immediately buy QCAD directly via partners like DVeX, Newton, Bitvo, Netcoins and Coinsmart. According to Stablecorp, QCAD is fully supported by crypto custodians such as global crypto processor BitGo and local crypto custody service Balance.

In the future, the company plans to extend QCAD to more networks than Ethereum, the firm said. Stablecorp’s chief operating officer (COO) Rob Durscki wrote in an email to Cointelegraph:

“QCAD, by concept, is chain agnostic. Our main concern is user experience and security, and that’s what led us to start with Ethereum, due to its robust infrastructure and successful past and current projects. Nonetheless we plan on assessing additional networks, always focusing at our clients’ experience.”

Canada’s FinTRAC to start regulating QCAD in June 2020

As some of the Stablecorp’s partners claim that QCAD is the “first fully complaint stablecoin with a 1/1 CAD equivalency,” Durscki emphasized the company’s work with local financial regulators. Durscki said that QCAD is “fully compliant based on relevant regulations.” Namely, that entails Know Your Customer and Anti-Money Laundering (AML) policies and security.

Stablecorp’s policies and systems are also designed to be fully compliant with Canada’s major AML agency, the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC). Durscki, who used to work at big four auditing firm Deloitte, said that the FinTRAC will start regulating Stablecorp under a certain business category in June 2020:

“Our policies and systems are designed fully compliant with FINTRAC requirements for Money Service Businesses (MSBs), the category under which our business will start being regulated on June 1st., the date regulation is expected to change in Canada.”

Cointelegraph reached out to FinTRAC with additional queries and will update the piece as soon as we hear back from the regulator.

Additionally, the COO assured that Stablecorp holds their CAD deposits with an independent custodian that “provides periodical statements of CAD balance versus QCADs in circulation” to ensure that QCAD is backed by the appropriate amount of the Canada’s fiat currency.

While Stablecorp calls QCAD the “first Canadian dollar stablecoin designed for the mass market,” the coin is apparently not the first stablecoin pegged to the Canadian dollar. To date, there are at least two other CAD-pegged stablecoins, including Coinsquare-backed eCAD and TrustToken’s TrueCAD.

Source Cointelegraph

Tether Launches USDT Stablecoin on Algorand Blockchain

Leading stablecoin operator Tether launched its U.S. dollar-backed stablecoin USDT on the Algorand proof-of-stake (PoS) blockchain.

In a press release on Feb. 10, Tether announced that USDT on Algorand will feature confirmation times as low as four seconds and transaction fees of a fraction of a percent. Tether chief technical officer Paolo Ardoino said:

“Our latest collaboration with Algorand leverages the speed and security of Algorand’s protocol to give traders fast settlement and reduced counterparty risk in their fiat to digital asset transactions.”

The latest platform to host USDT

Per the release, Tether is the first stablecoin that launched on Algorand’s blockchain. So far, USDT has already launched on Ethereum, EOS, the Liquid Network, Omni and Tron (TRX).

USDT is the leading stablecoin on the market and as of press time it has a market value of $4.6 billion and reports a 24-hour trading volume of $46.1 billion according to CoinMarketCap

Major financial institutions including central banks and major technology and financial services firms have entered the stablecoin space. 

In March, Cointelegraph reported that six international banks have reportedly signed letters of intent to issue their own stablecoins backed by their national fiat currencies on IBM’s now-live blockchain-powered payments network, “World Wire.”

Source Cointelegraph

Crypto Tycoon Winklevoss Brothers Obtain Six Stablecoin Patents

Tyler and Cameron Winklevoss, the founders of the Gemini cryptocurrency exchange, have obtained six stablecoin-related patents, according to filings with the United States Patent and Trademark Office. 

Three of the patents — the first, second and the fifth on the list — all  describe systems for changing the supply of a public blockchain-based stablecoin. The first patent describes how trusted third parties such as exchanges or banks can generate the asset, also on-demand.

Stablecoins as a part of traditional finance

Two of the patents — the third and sixth on the list — describe a system for creating a stablecoin on a public blockchain. The third patent also suggests that backed stablecoins could be used as collateral in financial transactions that are executed via smart contracts.

The fourth patent — filed on April 23, 2018 — “relates to the use of a stable value digital asset to pay dividends for securities and other financial instruments tied to a blockchain.” This paper suggests that dividends from securities like stocks could be paid in stablecoin.

The battle for crypto patents

As the cryptocurrency space is maturing and showing real potential, major companies are increasingly researching relevant technologies and patenting them. As Cointelegraph reported in late January, tech giant IBM has been awarded a patent for the development of a “self-aware token” designed to record events of an offline transaction.

Brian Amstrong, the CEO of major crypto exchange Coinbase, has patented a system that allows users to transact Bitcoin via email and his company received a patent for a system that identifies and flags non-compliant accounts at the end of 2019.

Walton professor of information systems and the director of the Blockchain Center of Excellence at the University of Arkansas Mary Lacity recently suggested that the U.S. and China are currently battling for dominance in the blockchain industry. On Feb. 1, the Chinese patent application process for blockchain technologies was clarified in an attempt to streamline it and gain an advantage in this battle.

Source Cointelegraph

Bitfinex Users Can Now Trade Tether Gold Stablecoin Against Bitcoin

After launching trading of gold-pegged stablecoin Tether Gold (XAU₮) last week, Bitfinex now allows users to trade Tether Gold against Bitcoin (BTC).

On Jan. 30, Bitfinex has rolled out three margin trading pairs for Tether Gold, a digital asset backed by physical gold, which was introduced by Bitfinex’s affiliate firm Tether on Jan. 23.

The crypto exchange exchange now allows traders to trade Tether Gold against Bitcoin as well as the U.S. dollar and dollar-pegged stablecoin Tether (USDT).

Margin trading — a feature that enables traders to borrow funds to increase leverage — will require an initial equity of 20% and provide a maximum leverage of 5x, Bitfinex noted.

Tether has been accused of not backing its USDT token with enough dollars 

Tether Gold is one of the stablecoins launched by major cryptocurrency firm Tether alongside the controversial stablecoin USDT. Known as the world’s leading stablecoin, USDT has been subject to multiple controversies as some reports suggested that Tether does not have enough dollars to back the token. The company has been struggling to convince the public that USDT is backed by the appropriate amount of dollar holdings.

Meanwhile, Tether Gold is claimed to be the “best way to hold gold” as its physical gold storage backing is purportedly held in a Swiss vault, adopting “best in class security and anti-threat measures.”

Tether and Bitfinex are facing a lawsuit on crypto market manipulation

On top of the controversy around Tether’s USDT, both Tether and Bitfinex have been accused of cryptocurrency market manipulation, with some ongoing lawsuits alleging that the companies caused Bitcoin’s 2017 bull run that lead up to the all-time-high of $20,000 per coin. 

As the companies have faced multiple suits on the matter, a court in New York ordered on Jan. 24 to merge four lawsuits against Tether and Bitfinex. As recently reported by Cointelegraph, the consolidation of suits has raised questions regarding the plaintiff’s leadership.

Cointelegraph News

One Wallet Owns 27% of Ether Behind MakerDAO’s Sai Stablecoin

Of all the Ether (ETH) locked in the collateralized debt positions (CDPs) of the old MakerDAO system, 27% belongs to a single Ethereum address. Financial technology data firm Digital Assets Data shared these findings with Cointelegraph on Jan. 26.

Dai, which was created by MakerDAO, allows users to borrow or generate the stablecoin by staking their cryptocurrency holdings as collateral. Dai was not supported with bank accounts of reserve currencies but rather is generated by putting Ether into a CDP smart contract.

In November 2019, the Dai stablecoin reached its 100 million token debt ceiling and introduced multi-collateral Dai (MCD) that can be backed by multiple assets.

The old, single-collateral Dai — Dai that generated only with Ether — became known as “Sai,” while the new MCD is now referred to as “Dai.” CDPs for different assets were rebranded as “vaults” i.e. Ether is stored in an Ether vault, while Basic Attention Tokens (BAT) are stored in a BAT vault. 

MakerDAO’s ecosystem growth

According to Digital Assets Data, about 155,000 CDPs were initiated on the old version of the Maker protocol and 77% of those held under 0.05 ETH. Brandon Anderson, a data science lead at Digital Assets Data, told Cointelegraph:

“There is one address that maintains 27% of the value locked in CDP’s. Likewise, the new Vaults system has a similar distribution, with one address holding 15% of the value locked. As Maker continues to grow, we will see how these distributions play out and if there is more adoption within the lower bins.”

Anderson added that these addresses are not necessarily a single entity:

“It is possible that one or more of those addresses could be smart contracts that contain ETH as a part of MakerDAO, and do not represent a single entity. Without a significant amount of additional research, we cannot commit to singling out/identifying these addresses.”

He concluded that, while there are large players that likely control a disproportionate amount of locked Ether in the ecosystem, the amount of total locked assets has increased over time and “these protocols are indeed open to anyone that wants to participate.”

Over 3,500 vaults have been created with the new system, most of which hold over 1 ETH, according to Digital Assets Data.

Ether locked in DeFi applications reaches an all-time high

As Cointelegraph reported in late November 2019, the number of Ether locked in decentralized finance (DeFi) applications reached an all-time high of 2.7 million ETH, according to DeFi monitoring resource DeFiPulse, and has been steadily growing since the end of June.

As of press time, DeFiPulse shows that the total value of funds locked in DeFi applications reached $793.1 million (an all-time high of 3.2 million ETH), of which over 57% ($453.5 million, an all-time high 2.5 million ETH) is in the MakerDAO system.

Source Cointelegraph

Tether Launches Gold-Backed Stablecoin and Begins Trading on Bitfinex

Tether is now supporting a gold-backed stablecoin, Tether Gold (XAU₮), according to a Jan. 23 press release. One token represents ownership of one troy fine ounce of physical gold, currently worth approximately $1,550.

The new product is available as an ERC-20 token on the Ethereum blockchain, as well as a TRC20 token on Tron (TRX).

The funds are said to be backed by physical gold held in a “Switzerland vault,” the press release reads. According to Tether, its gold offering is the only product among its competition that does not charge custody fees.

Tether has also invited all exchanges wishing to support the new token to contact the company. Blockchain information for the Ethereum contract shows that there is currently an outstanding supply of almost 4,000 tokens, which would be equivalent to a $6.2 million market capitalization. 

Bitfinex has already launched XAUT trading, with one quarter of the ERC-20 supply having been moved to Bitfinex. As a closely-affiliated company to Tether, it was expected for Bitfinex to be the first to offer the new token.

Plans for commodity-backed Tethers were in full swing since at least September 2019.

Tether has often been criticized for its opaque reserve management, with one high-profile class action lawsuit alleging that the company used this to manipulate the market in 2017.

In addition, Bitfinex reportedly used Tether reserves to cover a liquidity shortfall following issues with its payment provider, Crypto Capital Corp.

Source Cointelegraph

Pornhub Adds Tether Stablecoin as New Crypto Payment Option

Adult entertainment website Pornhub has added a new cryptocurrency payment option after PayPal had abruptly stopped servicing its models in late 2019.

According to a Jan. 23 blog post, Pornhub now supports Tether (USDT) — a major United States dollar-pegged stablecoin — to allow instant and zero-fee payments via the crypto wallet and browser extension TronLink.

Pornhub supports Tron-based USDT

TronLink is a native wallet for Tron (TRX), the 12th largest cryptocurrency by market cap that is backed by the Tron Foundation. The USDT token became available on the Tron network after Tether and the Tron Foundation partnered and released the first Tron-based USDT tokens in April 2019.

In order to start sending and accepting payments in Tether, Pornhub models download the TronLink wallet app that is available both on Apple Store and Google Play, Pornhub noted. Alongside Tether, Pornhub is also now supporting a new payment processor known as Cosmo Payment.

Tron CEO Justin Sun subsequently commented about the news on Twitter, saying that the new crypto payment option is a good way to support “victims of centralized payment platforms like PayPal.”

PayPal halted its service for Pornhub due to alleged payment permission violations

The news comes after PayPal, one of the world’s biggest online payment processors, halted its payment support for Pornhub models in mid-November 2019. According to reports, PayPal stopped doing business with the site because Pornhub purportedly made some payments without its permission.

Following the news, the crypto community made a push for major cryptocurrency Bitcoin (BTC) as a new payment option on Pornhub. Meanwhile, Pornhub models were reported to have a lack of general knowledge of cryptocurrency, with some models noting that they did not know what crypto is.

Porn pushing crypto adoption?

Pornhub has been gradually working on promoting crypto use on its platform. In August 2019, the adult entertainment streaming website partnered with cryptocurrency payment and billing startup PumaPay to enable user payments in crypto.

Back in 2018, the adult entertainment website partnered with cryptocurrency Verge (XVG) to accept the coin as payment for Pornhub Premium and all Pornhub purchases. As reported by Cointelegraph, Verge’s price skyrocketed just after PayPal’s decision to pull the plug on Pornhub in November.

Source Cointelegraph

WisdomTree Grows a Stablecoin Today to Nurture a Crypto ETF Tomorrow

The news that WisdomTree, a major asset manager with $63.8 billion in assets under its belt, plans to launch a regulated stablecoin — pending approval from the United States Securities and Exchange Commission — could be a significant development.

It would bring a unique combination of being an enterprise level and having financial regulatory experience to the stablecoin arena — and if talks with the SEC go well, perhaps even the first U.S.-regulated crypto exchange-traded fund.

The stablecoin will be pegged to a basket of assets such as gold, fiat currencies and government debt, Cointelegraph reported on Jan. 12. However, no formal application or proposals appear to have been filed with U.S. regulators yet.

A battle brewing?

This development may signal a nascent competition among leading U.S. asset managers for dominance in the crypto sector. WisdomTree told Financial News, which first reported the story, that it “is rushing to launch a regulated cryptocurrency in the U.S. to get ahead of industry giants BlackRock and Fidelity Investments in the digital currency space.”

“People are innovating,” Macrae Sykes, portfolio manager and analyst at Gabelli and Company, told Cointelegraph, adding that:

“Slowly, steadily we’re seeing more interest in Bitcoin among large asset managers like WisdomTree.”

Fidelity itself wrote in a Jan. 9 report that “while there are yet unanswered questions, its [Bitcoin’s] position is cemented, and its potential cannot be ignored.” In December, State Street Corp., a top-five asset manager, announced a digital asset pilot project with crypto exchange and custodian Gemini Trust. Jonathan Steinberg, founder and chief executive of WisdomTree, said during the announcement:

“You want to be early. We came to ETFs 13 years after State Street. This gives us an opportunity to be ahead of the State Streets, Fidelitys, on regulated stablecoins.”

Will a crypto ETF follow?

An exchange-traded fund is a basket of securities that are bought or sold through a brokerage firm on a stock exchange. WisdomTree specializes in ETFs and is the seventh-largest ETF provider in the U.S. It has been a leader in bringing ETF products to market, according to Sykes, who covers the firm as well as other asset managers — particularly its innovative Japan Hedged Equity Fund ETF (DXJ) and Europe Hedged Equity Fund (HEDJ). So, will a crypto ETF follow?

The firm itself has said a stablecoin is just a natural extension of its ETF business. In early December 2019, WisdomTree launched a physically backed Bitcoin exchange-traded product on Switzerland’s principal stock exchange.

Related: US Bitcoin Derivatives Market, Highlights of 2019

A stablecoin is usually tethered to a relatively stable underlying asset, like the U.S. dollar or gold, and its creation-redemption mechanism is similar to an ETF, which helps keep values close to the underlying asset. This could help, at least in theory, with solving a persistent crypto problem: price volatility.

Stablecoins like Gemini Dollar and Tether that are pegged one-to-one with the U.S. dollar generally trade at about $1.00. Luciano Somoza and Tammaro Terracciano also compared Facebook’s Libra proposed stablecoin to the financial instrument:

“[Libra] feels like dejà vu for anyone familiar with ETFs. The creation-redemption mechanism is the same and ARs (authorized resellers), as defined by Libra, operate like authorised participants in the ETF market.”

WisdomTree has acknowledged that the structure of stablecoins and ETFs are similar, but product users would differ. The firm’s stablecoin is expected to be used mostly by cryptocurrency traders. ETFs, by comparison, are often marketed to mainstream investors.

The SEC hurdle

Getting regulatory approval for a stablecoin or a crypto ETF is no easy matter. In the U.S., the SEC continues to place obstacles before the Libra stablecoin, and it hasn’t warmly welcomed crypto ETF applicants, either. More than a dozen ETF proposals have failed. Cameron and Tyler Winklevoss, the founders of Gemini, have been rejected twice.

Only this past week, Bitwise Asset Management requested the withdrawal of its SEC application for a Bitcoin ETF, “the second major ETF withdrawal in recent months following similar actions by VanEck,” as Cointelegraph reported.

It’s not hopeless

However, recent misfortunes do not mean that it’s impossible to get a crypto ETF approved. SEC Commissioner Robert J. Jackson Jr. told Roll Call last year that “eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so,”

On Jan. 13, ETF Trends CEO Lydon told CNBC’s ETF Edge that the chances of a Bitcoin ETF happening within the next year stood at 60%. Worth mentioning is that another participant on the program, DataTrek Research’s Nick Colas, gauged the probability at only 10%.

Related: The SEC Does Not Want Crypto ETFs — What Will It Take to Get Approval?

One positive sign, according to Lydon, is that the SEC recently approved its first 1940 Investment Act-approved Bitcoin fund through the NYDIG Bitcoin Strategy Fund, a newly formed investment company that offers its shares for sale, though it has a limit of only $25 million. Lydon went on to add that the growing use of Bitcoin derivatives could help mitigate the BTC liquidity concerns that the SEC harbors.

“We’re still in the early stages,” Sykes told Cointelegraph. “We’re a long way from a regulatory framework that will embrace a Bitcoin ETF.” The continued fraud cases, the pump-and-dump flimflam and a fair bit of hype are slowing regulatory acceptance. The SEC remains concerned about potential market manipulation.

Infrastructure investments

Meanwhile, WisdomTree is also investing in crypto infrastructure projects. On Jan. 7, it announced its investment in the startup Securrency Inc., one of the top institutional-grade blockchain builders in the financial and regulatory space, Cointelegraph reported.

The basic idea seems to be that an ETF can be more efficiently managed on a blockchain platform, bringing ETFs to a broader range of investors and enhancing the investor user experience, the firm said.

Overall, the crypto sector has struggled to gain validation from both institutional investors and regulators, and for that reason asset-manager WisdomTree’s multi-front embrace of regulated cryptocurrency and blockchain infrastructure can only be viewed in a positive light.

Source Cointelegraph

Asset Manager WisdomTree Hopes to Launch a Stablecoin in the US

Asset manager WisdomTree intends to launch a regulated stablecoin in the United States, financial news outlet FNLondon reported on Jan. 13.

Per the report, WisdomTree is looking to deploy a digital currency backed to a basket of assets such as gold, fiat currencies or government debt. The firm also intends to obtain approval by the U.S. Securities and Exchange Commission (SEC) for its project.

The news follows a recent announcement that WisdomTree invested in a startup called Securrency Inc., one of the top institutional-grade blockchain builders in the financial and regulatory space. At the time, the firm announced that it is looking to harness blockchain technology for the ETF market.

According to its website, WisdomTree has a total of $63.7 billion in assets under management.

Regulatory pressure on stablecoins

WisdomTree’s focus on seeking SEC’s approval is interesting given the adversity that regulators have shown to other managed stablecoins, including Facebook’s Libra project. As Cointelegraph reported at the end of December, Switzerland’s President said that the project as it currently stands has failed to obtain regulatory approval.

During the same month, the president of the European Central Bank, Christine Lagarde, said that the financial institution should be ahead of the curve regarding the demand for stablecoins.

Source Cointelegraph