Cryptocurrency Regulation in the Caribbean: Is It the Perfect Sandbox?

How many Caribbean countries do you know off the top of your head? Out of almost 700 Caribbean islands only about 30 are inhabited, each with their own stance on cryptocurrency.

The Caribbean Islands are first and foremost known as tourist destinations, but they have also, over time, picked up a reputation as shady offshore havens. The local regulatory stances on cryptocurrency are slow to evolve but are consistently pointing towards a more transparent future.  

Despite their reputations, efforts are underway to regulate cryptocurrencies in the Bahamas and elsewhere in the Caribbean. A hotbed for fintech, the Caribbean has been revitalized by the growing and largely unregulated Bitcoin market. 

Here is an overview of the Caribbean cryptocurrency industry from Solomon Brown, Head of PR for Freewallet, a cryptocurrency wallet developer

Islands, regulations, and cryptocurrency usage

Cryptocurrency regulations vary from island to island. Caribbean countries have different views of distributed ledger technologies and blockchain. Islands like the Bahamas and Antigua and Barbuda are well on their way to having established cryptocurrency regulations, Haiti’s viewpoint on the matter can be called controversial and Cuba is a bit behind the ball on passing cryptocurrency laws. 

Image via Pixabay

The Bahamas

Legislators in the Bahamas have signaled that they would like to incorporate cryptocurrency into the legal framework of the island’s economy, but with the way things stand now, there’s still a lot of work to do for that to happen. 

Graham Thompson Attorneys, a leading Bahamian law firm, concluded in a whitepaper, titled, ‘’The Bahamas’ place in a Cryptographic World’’: “It is important that the Bahamas seek to not wedge virtual currency business into a legislative framework that doesn’t quite fit but to develop a piece of legislation, either by amendment to the PSA or otherwise, that is virtual currency specific.”

 Indeed, the only official law offering regulatory treatment in the sphere is the old Central Bank of the Bahamas Act that dates back to 2010 when we had hardly heard of legal framework and standards in the digital token sphere

Image via Pixabay

The act defines currency as follows: “8. (1) The currency of The Bahamas shall be the notes and coins issued by the Bank under the provisions of this Act. (2) The unit of the said currency shall be the dollar, which shall be divided into one hundred cents.” It mentions that it is the “Sole right of the Bank to issue notes and coins”. Obviously, as it makes no specifications for digital tokens, it is hardly able to regulate the emerging local cryptosphere. 

Little by little things are beginning to change. On November 7, 2018, the Central Bank of the Bahamas issued a discussion paper on proposed approaches to the regulation of cryptocurrency assets. This paper describes the proposed regulatory posture on cryptocurrency assets and related instruments for supervised financial institutions (SFIs) under the remit of the Central Bank of The Bahamas. 

This includes the application of government-imposed limitations on the range of cryptocurrency payment instruments called the Exchange Control (EC) regime. The planned operations will allow Caribbean countries to better stabilize their economies by constraining in- and out-flows of currency, and subsequently keeping exchange rate volatility at bay. 

In 2019, the Securities Commission of Bahamas (SCB) took cryptocurrency a step further by releasing the draft called “Digital Assets and Registered Exchanges Bill, 2019.” 

The DARE Bill, 2019 regulates the requirements for issuing or selling digital tokens in the country, and how sellers and related firms must conduct their businesses. It also covers the sections that ensure the entrepreneurs comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) laws and protect their clients’ data and assets.

Cuba

In Cuba, cryptocurrency may be the ultimate solution for US economic sanctions-caused problems. Not supported by the government, Bitcoin has been extensively used to top up phones, shop online and send funds after the roll-out of mobile internet in 2018. The founder of the Telegram channel CubaCripto estimates about 10,000 Cubans trade cryptocurrencies. Some use it as a side job, some get remittances from abroad. 

Brazil-registered Fusyona can be called the first cryptocurrency exchange operating in Cuba. It helps with remittances, charging up to a 10% fee and working via larger exchanges. As other platforms hesitate to develop activity in the country, cautious of the US penal fines, Fusyona’s founder is using Bitcoin, saying “for Cubans it is a necessity and can be a solution to their exclusion from the global financial community.” Nevertheless, the exchange is planning to get authorised by the Cuban government. 

Image via Pixabay

Funnily enough, in July 2019 the Cuban government was considering issuing its own cryptocurrency coin, but it decided to hold back on it to avoid money laundering and/or clashing with its communist principles. 

The state’s central bank has been investigating the pros and cons of cryptocurrency and will soon discuss the prospects of using cryptocurrency at a meeting with global financial leaders in Washington. But, in the meantime, there are no administration bills that specifically place cryptocurrency under regulation. 

Haiti

The legal status of cryptocurrency in Haiti is controversial. Cointobuy’s analysis tool has ranked Haiti 208 out of 249 countries in terms of cryptocurrency safety. Obviously, it isn’t secure to invest in ICOs or trade cryptocurrency in this country. Nevertheless, cryptocurrency entrepreneurs of this small island have come up with a number of brilliant ideas. It is safe to say Haiti is enjoying a real blockchain boom led by a number of exciting and meaningful startups that are trying to shape the future of agriculture, production, and other spheres.

For instance, AgriLedger is a project that will enable users to trace the food supply chain and find out how products are grown or transported. The Blockchain Cotton Project (BCP) works in a similar way: it will endorse smallholder cotton farmers that provide cotton for US clothing producers. Farm locations will be tracked by GPS and BCP will also verify whether the cotton is organic or fair-trade and guarantee the farmers a fair price for their cotton. 

Apart from this, Haiti is the homeland of groundbreaking educational projects like Cryptocurrency for Haiti and the Haiti Blockchain Alliance. They help common people get acquainted with the potential of blockchain. The Haitian Central Bank announced at the Haiti Tech Summit in June 2019 that it will be launching its own digital currency.

Dominican Republic

Little is known about the cryptocurrency industry in this region. After the Dominican Republic government banned using any kind of cryptocurrencies in transactions, all the financial institutions in the country cut down on crypto. However, citizens have kept using it at their own risk. 

Barbados

In Barbados, cryptocurrency regulations are still on the fence. The Central Bank of Barbados has expressed a positive attitude towards BTC and is starting to make changes on this front. 

On July 5th, Bitt Digital Inc. became the first blockchain-based company to complete and exit the 8-month-long regulatory sandbox guided by the Central Bank of Barbados and the Financial Services Commission. Governor of the Central Bank of Barbados, Cleviston Haynes, confirmed that the Regulatory Review Panel (RRP) considered the type of business activity trialed by Bitt to be a candidate for regulation under legislation that is currently being drafted. 

In June 2019, the Central Bank of the Republic of Haiti invited Bitt to present the likely benefits of a national blockchain-based digital currency.

The Organisation of Eastern Caribbean States

This inter-governmental organization aims at promoting economic development along with other legal aspects. Protocol members and Anguilla use the Eastern Carribean Dollar issued by the Eastern Caribbean Central Bank. 

In spite of having no cryptocurrency regulations, these 11 countries have signed up to participate in a pilot program that will test the use of cryptocurrencies alongside the country’s national currency. Only time will tell if the blockchain-based digital version of XCD is OECS’s short cut to a cashless society.

Saint Kitts and Nevis

This OECS member is willing to take part in the Digital Eastern Carribean Dollar ‘test drive’. However, the Saint Kitts and Nevis government is negative about accepting Bitcoins as a payment for the Citizenship by Investment Program (CIP), which has been warmly welcomed in many Caribbean countries. 

Antigua and Barbuda

Unlike their Caribbean counterparts from Saint Kitts and Nevis, government officials from Antigua and Barbuda are drafting laws to regulate Bitcoins. According to local media outlets, Antiguans are interested in using cryptocurrency to pay for public services.

The authorities of the Caribbean jurisdiction are developing a special bill with the aim of securing the status of legal currency for Bitcoin, the circulation of which is allowed in the territory of Antigua and Barbuda.

The decision was made during a meeting of the Cabinet of Ministers with experts from the Antiguan Leisure & Gaming Association, dedicated to best practices in accepting Bitcoins as payment for goods and services. Thus, very soon, Bitcoin could turn into an official means of payment in Antigua and Barbuda.

Interestingly, while enumerating the benefits of Bitcoin, Antiguan officials who promote its legalization in their home country noted that Bitcoin makes it easy to track transactions, which is very important considering how many see the Caribbean country as a “tax harbor. ”

Saint Lucia

In recent consultations with the authorities of Saint Lucia, representatives of the mission of the International Monetary Fund (IMF) said that central banks should not ignore Bitcoin. According to IMF experts, virtual currencies can compete with existing currencies and also challenge monetary policy.

Subsequently, it was reported that the Saint Lucian government was considering Bitcoin’s prospects and was exploring options on how to “make it work.” A corresponding statement was made by the Prime Minister of Saint Lucia, Allen Chastanet.

Caribbean cryptocurrency evolution

The 2018 BIS Annual Economic Report suggested that cryptocurrency is the “new petal in the money flower.” The taxonomy of money can be defined by four properties: the issuer, the form, the degree of accessibility and the payment transfer mechanism. Cryptocurrencies combine three key features:

  1. They are digital. Cryptos aims at providing security and rely on cryptography to prevent hacking and fraudulent transactions. 
  2. They are private, and by design, they have no intrinsic value, unlike commodity money. “Their value derives only from the expectation that they will continue to be accepted by others” – the report states.
  3. They allow for a digital P2P exchange.

The competitive advantage of cryptocurrency is its underlying distributed ledger technology. It enables each user to verify transactions in their copy of the ledger, ensure the accuracy of each transfer and rule out the possibility of double-spending.

Image via Pixabay

What does this mean for the Caribbean islands?  BTC has a number of potential benefits that could let the financial genie out of the bottle. 

For the small Caribbean countries that made a name for themselves as tax havens in a similar way to the Latin American Panama, cryptocurrency offers a way of evolving into the future. After a massive leak of financial files tied to the fourth-biggest offshore law firm in the world, it was hard for Panama to recover from reputational losses. Panama shifted its focus onto cryptocurrency at the official level by working out taxation protocols and supporting blockchain technology. 

The Caribbean seems to be following Panama’s example. The Bahamas are drafting regulations of cryptocurrency assets. The British Virgin Islands are issuing a national cryptocurrency coin. Antigua and Barbuda are offering citizenship for BTC. In other words, a good many Caribbean governments are willing to put themselves on the map in the cryptocurrency space. 

Image via Pixabay

In the opening stages of introducing cryptocurrency into the global economy, it is crucial for blockchain-based projects to keep security issues crystal clear. Gaining user trust is key to the mass adoption of Bitcoin. With operational security in the spotlight, it is important that locals use reputable cryptocurrency services such as top market leaders like Binance, Coinbase, and Bitfinance. As far as safe wallets are concerned, Freewallet is proud to work side by side with these big names to make cryptocurrency more available to a wider audience. It’s been a privilege for us to join our efforts in order to modernize the financial services sector. 

The Caribbean is boldly stepping into the future with cryptocurrency and we are happy to help this process along.

The post Cryptocurrency Regulation in the Caribbean: Is It the Perfect Sandbox? appeared first on CoinCentral.

Source: Coin Central

Crypto’s New Deal: This DeFi Platform is Putting Unused Tokens Back to Work

Decentralized Finance “DeFi” has experienced tremendous growth in the past few months, and it looks like it’s only going to continue ramping up. According to DeFi Pulse, there is roughly $1.13B locked into DeFi contracts, nearly double the amount at the start of 2020.

The underpinning of DeFi’s recent rise to popularity is the series of unconventional financial tools that are helping democratize the future of global peer-to-peer lending and transactions. 

We connected with the Chintai team, a Cayman-based platform that seeks to enable the leasing of unused utility tokens. If you haven’t heard about utility tokens in a while, you’re not alone. Utility tokens, or tokens that are essentially a promise to access a future product or service, were exceptionally hyped in the 2017 ICO craze, but the ensuing bear markets cooled off the utility market landscape. 

Utility tokens are meant to be used, but most of them are lying dormant. Utility token holders have seen some of their utility token values plummet upwards of 95% and have moved onto focus on other things. 

Chintai wants to let utility token holders get some actual utility out of their tokens. With over 250M in transaction volume, Chintai appears to be offering a significantly attractive value proposition, if not at least demonstrating the DeFi ethos of enabling uncaptured financial opportunity in action. 

We spoke with Ryan Betham, Chintai COO, about DeFi, Chintai’s recent growth, and the utility token landscape. 


Why is DeFi an exciting space right now? 

DeFi pioneers are producing tangible use cases that deliver on the dreams which ignited the cryptocurrency movement in the first place. It’s about giving people control of their money, and democratizing access to opportunity – all while eliminating value extractors. 

So, here we are today with a plethora of DeFi protocols. Many of which are offering decentralized lending. And it’s working, really well. We’re seeing proof that we don’t need 3rd parties to facilitate one of the most basic building blocks of a new economy – borrowing and lending. 

And it’s being done on a global scale, without borders, all executed with code. It’s like watching sprouting seeds for a vision of a new digital economy. How cool is this stuff?!

Can you hypothesize how much more the DeFi space has to grow? 

If you broaden the definition of DeFi to include any financial instrument that relies on smart contracts and distributed ledger technology to function, the sky’s the limit. The total monetary value of the global financial system is somewhere around $300 trillion– with a “T”. Not everything needs to be on blockchain.

 But there’s a good case to be made that we could see a global financial system that is mostly reliant on blockchain tech. It’s simply too efficient and secure compared to the existing infrastructure. Market principles would suggest you either adapt or die.   

Take the $109 trillion bond market as an example. That’s something we’re trying to help fix and blockchain technology is a perfect instrument to bring massive efficiency gains in bond markets. And the great thing is that the solution is disruptive while still being beneficial for big banks, small banks, businesses, and investors simultaneously. Incentives align and everyone wins. 

So once people understand the value proposition, we expect this stuff to catch on like fire. It’ll be one of those leaps in evolution that seems slow in the moment, but fast in retrospect. 

“Utility tokens are meant to be used, but most of these tokens are lying dormant, collecting virtual dust for the investors that purchased them.” How does Chintai aim to address this issue? 

We built the first high-performance, decentralized exchange for lending and borrowing token utility. Not borrowing the currency – borrowing the utility itself. We started with an EOS token leasing market. 

For people that don’t know, EOS tokens give you ownership of network CPU and NET. You can think of CPU and NET as the battery power you need to run an application or transact on the network. Without CPU and NET you can’t use the network.

So people who own the EOS token, but don’t need to use the CPU and NET, can set an interest rate and lend out their resources to someone who needs CPU and NET. 

The borrower pays that interest rate for a fixed period and receives the CPU and NET for their applications or transactions. The cool part is that the borrower doesn’t actually have possession of the tokens because you can delegate CPU and NET while maintaining custody of the token itself. 

The whole process is handled by smart contracts so counterparty risk is virtually non-existent. We saw $250 million in transaction volume within six months, had 33,000 unique accounts using the instrument, and roughly $3 million in interest generated for lenders. 

Now we’re taking that concept and applying it to any utility token and even NFTs, which represent unique or bespoke items. So you know virtual items in games? Swords, skins, characters – whatever. We want to enable leasing of those items too. We’re also launching a handful of new leasing markets in early 2020 and we’ve already seen promising outcomes. It’s hard to not get excited about this stuff. 

What milestones does the non-fungible token (NFT) ecosystem need to hit to reach a point of critical mass? 

Generally speaking, the most important milestone is having developer tools that can enable smooth UX. Let’s take gaming for example. 

It’s an ecosystem that is ripe for disruption, but doesn’t quite have the tools that game devs need to fully utilize the benefits of blockchain tech. 

Gamers are already accustomed to in-game economies. But do you really think they’re going to manage private keys and login to a blockchain account for tokenized virtual assets? Mostly no. So game developers need tools to embed virtual items into games in a way the end-user doesn’t realize they’re using a blockchain at all.

We’ve built instruments for this use case specifically. The same engine that facilitates token leasing can also facilitate transactions for NFTs in games. 

And that engine can be used in the background, using our API, to embed the process of exchanging virtual items directly into games. No friction for the end user, but all the benefits of blockchain for the gaming industry. 

Can you explain how what Chintai is offering is different from competitors? 

We’re kind of like a swiss army knife for DeFi. The reason why we can have such a diverse offering is because of our high-performance on-chain order management system (OMS). This is super FinTech geeky stuff so bear with me. 

OMS’s match orders and execute agreed terms between buyers and sellers – it’s how an order book is populated on say a crypto exchange except those order management systems are offchain so you lose the transparency that comes with an on-chain OMS. 

Our on-chain OMS is agile and highly configurable. It allows us to rapidly build markets for anything from token leasing, to decentralized bonds, NFT trading, and everything in between. 

The other cool aspect of our OMS is that we can white label businesses to take part in any Chintai market by allowing them to curate their own front-end UI, set their own fees, and use our exchange in the background to facilitate order management and execution. 

This allows people to create highly customized portals or UIs for very specific needs. And the liquidity for every market is shared, so you don’t end up with fractionalized markets.

“Decentralized exchanges that lack compliance with global regulators are at risk of being shut down due to lack of consumer protection and anti-money laundering laws.” – What alternative does Chintai offer?

The on-chain OMS I just mentioned is a big part of it. Regulators want transparency. Since our OMS is on-chain they can trace and see token movements. In our case, accounts will link back to a person’s identity using KYC. 

Our users will have their compliance laws encoded into their accounts. And tokenized securities will also have compliance controls coded in as well. So as a user you can only access tokens that are considered legally compliant within the jurisdiction you live.

“Chintai lowers the cost for those who are trying to use the tokens while also providing yield to those who lend them.” – What interest rates does Chintai offer?

Chintai enables markets that have fluctuations like any other market. We’ve seen APR as high as 40%. But usually the APR is more reasonable. Somewhere around 3-10% depending on the market. 

Chintai’s suite of products looks pretty, well, sweet. Which of these is the most popular among your users? Which product do you think is being underutilized and offers a ton of value? 

The token leasing markets are most used. Mostly because they’ve been live the longest and the DEX is awaiting licensure approval from the Monetary Authority of Singapore so it’s not yet live. The most underrated aspect by far is the Chintai Merchant Network, i.e our OMS white labeling service. 

Merchants can set their own fees, build their own custom UI, and Chintai takes care of all order management and execution. It’s extremely powerful. After all, what good would it be if we had all these cool tokens, but couldn’t make a proper market to exchange them within applications or for various use cases? 

Can you walk us through how the most popular one works?

Talk to us. We explore exactly what market you want to make and we customize it for you. Or if we already have a market you want, but think could benefit from a better UI, then we white label you to use our OMS and share liquidity that’s already been established. In either case you need to build your UI and set your own fees. But we take care of the rest.

Why EOS?

Chintai was designed to be a high performance, enterprise-grade, fully on-chain Order Management System (OMS).  This inherently required us utilizing a blockchain that can handle high transaction volume with low cost; this made Etheruem an unsuitable choice in late 2017 when the project launched.

While the Chintai tech stack does utilize eosio, we are deploying on multiple instances including Worbli (for DeFi) and WAX, Ultra (for commercial gaming) – the EOS blockchain itself features as only a small component of the markets and services.  

Additionally, Chintai will shortly be utilizing Bancor’s DAPP Network for horizontal scaling, which includes their LiquidLink service to enable dApps on Ethereum to also leverage Chintai, with the benefits of the on-chain transactional throughput and reflecting back to Ethereum at settlement to minimize gas cost.

From financial service industry discussions to date, indications in terms of preference have been towards leveraging or spinning up an industry/private instance of eosio as the basis for DeFi services, and there is a reluctance to leverage any of the existing public blockchains. 

We will continue to make decisions based on our partner feedback and customer needs in that regard, but feel we have the right tech stack to be able to service and scale while leveraging the efficiency benefits of blockchain.

What does the Chintai Roadmap look like for 2020? 

2020 is a year of accelerated takeoff. Our primary focus is readying our tech and business for the DEX. We’re establishing our business development team in Singapore to enlist a consortium of banks to issue decentralized Bonds and securities and we’re opening a branch in Germany for our technical team.


This includes lining up a few companies that will pilot STO issuances on the regulated DEX. We are also launching a handful of token leasing markets and formalizing partnerships that will integrate our OMS for gaming, tokenized commercial real estate, and FinTech. 

To help power it all we’ve just opened a pre-seed round in early 2020. But what ambitious startup isn’t trying to raise money? So you probably knew that already. 

How can someone get involved with Chintai?

We are probably one of the more transparent and interactive teams. If you ask us what we’re doing at any moment we will tell you as much as we can. 

We’ve really enjoyed building a culture where our followers, users, and supporters can go on the ride with us. The best way to get close to the action is telegram or twitter. Both handles are chintaiEOS.

Twitter: @chintaiEOS
Telegram: https://t.me/ChintaiEOS
Email: hello@chintai.io

The post Crypto’s New Deal: This DeFi Platform is Putting Unused Tokens Back to Work appeared first on CoinCentral.

Source: Coin Central

3 Ways Coronavirus May Have Affected Bitcoin

  • Is there a correlation between bitcoins price action and the coronavirus spread? 
  • Virus-infected yuan placed in quarantine—Bitcoin fixes this. 
  • Bitcoin mining takes a dive following China’s coronavirus clampdown.

As coronavirus continues to spread mass panic around the globe, its impact on bitcoin is becoming more evident. Here are three critical repercussions for BTC amid the outbreak.

As The Coronavirus Spreads, Bitcoin Continues To Break Out

Bitcoin is proving its worth as a macro hedge against global uncertainty. Year-to-date, BTC has achieved a 35% boost and managed to hit a yearly high north of $10,000 last week.

” alt=”” aria-hidden=”true” />BTC year to date gains 2020 coronavirus
Bitcoin’s year-to-date gains seem to correlate with the coronavirus outbreak. | Source: Tradingview

For many, this is clear-cut evidence to solidify bitcoin’s status as a risk-off asset. The notion goes that with China’s economy weakening, Chinese investors have piled in on bitcoin to make use of its safe-haven narrative.

On Feb. 3, one of China’s foremost stock indices—the CSI 300—plunged 9% in what was dubbed its worst open in over a decade. To add salt to the already festering wound, the Shanghai Composite Index nosedived 8%.

Chinese stocks quickly bounced back. An attempt at economic stimulus appeared to do the trick, with the Chinese government cutting interest rates to bolster the economy. Meanwhile, bitcoin continues to hold near $10,000.

For eToro’s senior market analyst Mati Greenspan, the correlation between bitcoin and the coronavirus dip is merely coincidental. Speaking to CCN.com Greenspan said:

Amazingly, Chinese stocks have already fully recovered from the coronavirus dip. If stocks have scant been affected, it would be a difficult case to try and say that crypto has been noticeably moved by this.

China Quarantines Infected Cash. Can Bitcoin Fix This?

With the official death toll mounting to 1,775 and 71,811 confirmed cases of the coronavirus worldwide, China is stepping up its prevention game.

” alt=”” aria-hidden=”true” />Coronavirus global cases by Johns Hopkins CSSE CHina
Coronavirus global cases surmount 70,000. | Source(s): Johns Hopkins CSSE / GIS and Data.

One of China’s latest methods to help quell the spread of the coronavirus involves cleansing cash.

China has begun using ultraviolet light or high temperatures to disinfect banknotes, according to a central bank press conference. The prevention strategy includes quarantining the banknotes for up to two weeks before redistribution.

Preceding the recent new year celebration, China’s central bank made an “emergency issuance” of four billion yuan notes designated for Hubei-—the virus’ epicenter.

For the crypto community, this provides another positive narrative as to why…

Continue reading at CCN.com

 

 

Lendroid Foundation Founder Vignesh Sundaresan Speaks on His Entrepreneurial Philosophies

Vignesh Sundaresan is a serial entrepreneur and software architect with over 10 years of experience in product development. He’s the Co-Founder of BitAccess, a YCombinator alumni company that has grown into a large network of Bitcoin ATMs. Sundaresan has also helped fund projects such as Ethereum, Polkadot, Dfinity, Omisego, and Decentraland. 

Sundaresan has his eye on open protocols, back-end programming, and more specifically, facilitating a paradigm shift towards a more decentralized finance world. Recently, he founded and conducted a successful token sale for the Lendroid Foundation, a Singapore-based non-profit organization developing a non-rent seeking open protocol for Decentraland Lending and allied financial applications.

Your Twitter bio is “Software eats everything.” – Can you explain this quote?

This is a paraphrasing of something Marc Andreessen Horowitz said – Software is eating the world. On the surface, this seems like a catchphrase for disintermediation or ‘Uberization’. Of technology making conventional businesses obsolete. 

Uber ate the taxi medallion system, Amazon ate bookstores, DeFi will eat banks, and so on. 

But to me, this represents a very optimistic belief. Software is power, accessible power. If software eats the world, and anyone can access software – anyone can eat the world. That story of truly equal opportunity – that’s what this quote is about. 

How did you get into the cryptocurrency and blockchain world? What was your first experience with digital assets?

I had no crypto, to begin with, and no money to buy crypto. I got on bitcointalk and built an escrow service for people to be able to swap crypto. The transaction fee I earned was my first crypto. 

Could you describe your BitAcces experience?  What was it like setting up 100 Bitcoin ATMs in 18 countries? 

It was a heady, extremely optimistic time for me. There was this naivete that’s rare today, that what we were building would spread all over the world. There was also the gratification that comes from introducing something new to the world. In many of these locations, this was the first bitcoin ATM – Toronto, Montreal, Winnipeg. 

We were the coolest kids in town. I got to travel a lot, meet a lot of crypto OGs. They were the ones who bought ATMs, with the excitement of buying an arcade machine. In fact, that’s how I met Anthony di lorio, the co-founder of Ethereum. He was my first customer. He bought the first ATM in Toronto, around a BTC meetup. 

What were the trials and tribulations you had to overcome? 

BitAccess was a YC Alumnus, it was characterized by fast growth. Beyond a point, the hardest thing was the shift in focus from pure tech to tech that had to orient itself around compliance. Compliance related tools began to eat into more than half our time. 

The other hard part was the culture shock of moving from India to Canada. I was embraced by the crypto community, but I was figuring out entrepreneurship, how the world works…the culture shock never fully wore off until later.     

What’s the next big thing for cryptocurrency?

I believe virtual worlds and NFTs are in a very interesting zone, on the threshold of something incredible. Check out Cryptovoxels. They’re pushing the boundaries of how creatively a human can live. 

In your opinion, what does the cryptocurrency space need to make its next evolution? 

The obvious answer is scaling. The day we figure that out, transaction costs will come down to a few cents and will trigger a profound change across the board. The other change this space needs, now more than ever, are strong stories around the blockchain. 

Stories that hearken back to the optimism of 2014. The past two years have forced much of this community into a shell. There’s a lot of undirected aggression, skepticism. We need to mainstream big stories that bring back the ability to trust one another. 

According to your site, your investment secret is “not invest expecting it to boom, but to invest because you simply love the idea”

What are some companies (or industries) with ideas you love (not limited to cryptocurrency)?

If not crypto, then space exploration. It’s inspiring, another frontier. 

In crypto, I have always loved Decentraland – the core philosophy that your land, once it’s yours, can never be taken away. In an increasingly authoritarian world, this reality is an anchor. A galaxy on Urbit is another example. Digital art – say in makersplace or opensea. The truly original application of AI in Numerai. 

What do you view as the key growing moments for you as an entrepreneur in your life? What key lessons can you dispense for the entrepreneurs in the audience?

Entrepreneurship can work only if two things come together. 

The first is that you need to define your antithesis to an existing thesis. 

And the second is to understand and be at peace with the fact that you will at most achieve synthesis, a sort of a meeting point between the existing thesis and your antithesis. 

There’s a philosophy at the heart of this – an understanding that when you begin with an aspiration to reach somewhere, you recognize the transits in the middle, planned and unplanned, as things that augment your journey, not as burdensome wastes of time. 

This is inspired by the works of Deleuse, a French philosopher. In fact, we have named the current version of our protocol after Deleuze, if anything to remember that how we got here was not in a straight line, and where we go from here won’t be either. 

What are the most important things to follow in the cryptocurrency and blockchain space (ie. DeFi, international regulation, Libra, etc)? Why?

The three major issues that will impact layer 1 of the blockchain – Regulation (know your jurisdiction!), scalability, and governance. Everything that happens in these three arrowheads is relevant, and important. 

In your opinion, who are some of the brightest minds in cryptocurrency today?

Off the cuff, I follow Gavin Wood, Fred Ehrsam. And one off-kilter entry – @CryptoDonAlt. His viewpoint and take on this space is fascinating. 

If there was one single takeaway you can impart on our audience, what advice would you leave them with? 

Well, I can’t give advice, really, but I do have a suggestion – that we practice optimism, to attempt to reach back to the mindset of the crypto world before it became rich. To be more open, to give people a chance, maybe even a second chance. And to not confuse optimism with gullibility. Life is community, a multi-player game. We shouldn’t forget this when we’re playing crypto. 

 

The post Lendroid Foundation Founder Vignesh Sundaresan Speaks on His Entrepreneurial Philosophies appeared first on CoinCentral.

Source: Coin Central

This Bitcoin Bull Run Is Extremely Different To 2017’s Epic Rally

Bitcoin has been on a major tear over the last few weeks—with the bitcoin price adding an eye-watering 40% since the beginning of the year.

The bitcoin price, which was trading under $7,000 per bitcoin just two months ago, has surged to over $10,000 this weekendand many are expecting bitcoin, as well as the booming wider cryptocurrency market, to keep on climbing.

The latest rally comes some two years after the bitcoin price soared to almost $20,000 per bitcoin back in December 2017, rocketing from under $1,000 at the beginning of the year as bitcoin and cryptocurrency fever swept the world—but data suggests this bitcoin bull run is very different.

Bitcoin exchange deposits have dropped sharply over the last six months, suggesting the latest bitcoin rally isn’t being driven by retail investors, bitcoin and crypto analytics firm Glassnode data revealed.

“During last summer’s rally, we saw highs of over 60,000 unique daily deposits—likely investors taking profit,” Glassnode said via Twitter, adding the decrease could be due to long term bitcoin investors having “fewer incentives to sell.”

“Since then [bitcoin exchange deposits have] decreased by nearly 60%, down to 25,000.”

At the peak of 2017’s epic rally, bitcoin exchange deposits outpaced the bitcoin price, with Glassnode recording around 200,000 daily exchange deposits.

Bitcoin exchange deposits have previously increased along with the bitcoin price, with deposits falling back during bear markets.

However, deposits have continued to slide this year despite the uptick in the bitcoin price, leading many bitcoin and cryptocurrency traders and investors to attribute the latest bull run to long-awaited institutional investors buying up bitcoin.

“This breakout is the real deal,” said Willy Woo, partner at bitcoin and cryptocurrency hedge fund Adaptive Capital. “Fundamental investment activity is backing this $10,000 breakout.”

This theory is backed up by the latest numbers reported by the world’s largest bitcoin and cryptocurrency asset manager, Grayscale.

Last month, Grayscale revealed it recorded inflows of $600 million in 2019, more than 2013 through 2018 combined, and declared institutional money has finally arrived in the cryptocurrency space.

“If the persistent question is ‘where are the institutions investors in crypto?’ the answer is that they’re here and showing up in a meaningful size,” Michael Sonnenshein, managing director at Grayscale, said at the time.

Meanwhile, some are expecting the looming bitcoin halving event, which will see the number of bitcoin rewarded to miners cut by half in May, to trigger another wave of…

Continue reading at FORBES.com

 

 

Why Iranians are Avoiding Bitcoin, While Venezuelans Embrace It

There is a conjectured assumption that Iranians are clamoring for bitcoin to stave off the effects of biting sanctions, but the situation on the ground is different. Bitcoin trades in Iran are at an all-time low. They seem to be avoiding trades in the cryptocurrency, while Venezuelans embrace it.

Banks and financial institutions in the country are banned from dealing in cryptocurrencies, and this is one of the main contributors to this situation.

Other issues compounding the problem include exorbitant bitcoin prices. BTC is trading at just over a billion Rials per coin on LocalBitcoins at press time. This is at least $24,000.

The staggering price-point alone is enough to discourage even the most ardent of crypto enthusiasts. Few citizens can afford to buy bitcoin at this rate because of rising inflation rates, unemployment, as well as socio-political unrest. According to a recent World Bank forecast, the Iranian economy’s already expected to contract by about 9 percent this year.

Factors affecting the current bitcoin price hike include the banking system’s isolation from major international money transfer networks. The exclusion from systems such as SWIFT means that the process of sending or receiving funds from abroad is exceptionally complex, hence the premium surcharge. 

Bitcoin trade volumes in Iran

Bitcoin transactions in Iran are at an all-time low. (Image Credit: CoinDance)

Iranian Administration Encourages Mining Operations

The Iranian administration allows cryptocurrency mining and has already issued over 1,000 licenses to operators in the country. This is according to a recent communique published on Iran’s Banking and Economic System Reference Media (IBENA). It cites Amir Hossein Saeedi Nai, a member of the Information and Communications Technology (ICT) Guild Organization’s blockchain commission who confirms that the industry is growing rapidly and will be able to contribute over a billion dollars a year at full capacity.

He underscores the growing importance of the sector since the imposition of tougher sanctions by the American government. According to Nai, the country needs foreign exchange earnings now more than ever before. He highlights that the crypto mining industry is already showing immense revenue generation potential.

Iran has some of the lowest energy rates in the world at $ 0.008 per kilowatt-hour, and this has attracted major players from across the world.

A Different Scenario in Venezuela

Venezuela and Iran are both reeling from U.S sanctions, but their crypto ecosystems are notably different. While Iranian banks are barred from dealing in cryptocurrencies, financial institutions in Venezuela are allowed to transact in the Petro digital currency. President Nicholas Maduro’s administration unveiled the digital currency as the official national cryptocurrency in February 2018.

Crypto adoption in the South American nation is also impressively high. The country is among those with the highest number of crypto users. The trend has been spurred on by an extremely volatile national currency and a high inflation rate, which reached 500,000 percent in 2019.  The populace also has an aversion to the country’s banking system.  

According to statistics illustrated on LocalBitcoins, Venezuela’s current bitcoin trading volumes are at an all-time high. They’ve increased by over 60 times in the past 12 months. On the other hand, BTC trades in Iran have slumped by approximately 90 percent within the same period.  

Crypto adoption in Venezuela is high

Venezuela has among the highest number of crypto wallet users. (Image Credit: CoinDance)

Venezuela is currently a leader in crypto adoption. Over 1,000 locations across the country accept bitcoin. Moreover, major multinationals in the country, including Burger King, now accept BTC.

The post Why Iranians are Avoiding Bitcoin, While Venezuelans Embrace It appeared first on CoinCentral.

Source: Coin Central

A Short, Medium Term Bitcoin Price Prediction

BTC prices fell 6 percent to $8,620 within five minutes on Sunday shattering short-term bitcoin price predictions. The price decline affected all major trading platforms leading to fears that current prices might be overinflated.

The bitcoin market downturn had a domino effect on 20 of the most popular digital currencies. The prime digital currency traded at just over $9,000 before the semi-momentous plunge. It was the steepest decline this year, but the bulls appear to be slowly regaining control.

So, What Caused The Sudden Price Dip?

Liquidation of overleveraged long positions is believed to have caused the bloodbath. Bitcoin prices had risen by over 20 percent in the preceding weeks. The mini-rally was technically bound to hit a snag due to price inflation.

Liquidation typically occurs when a sudden plummet in prices dissolves long overleveraged market positions. Once the liquidation limit is reached, traders are forced to sell the digital assets put up as collateral.

About $110 million was liquidated on BitMEX alone during the price decline. This is according to data illustrated on DataMish. The figure represents about $15 million in actual assets. The platform offers 100 times leverage. It is likely that there was more liquidation on Binance, Deribit, and Kraken. Some analysts had warned that the recent price escalation lacked key drivers and feared that a pullback within the month was imminent.

Bitcoin prices are expected to skyrocket once the halving episode occurs. It leads to a 50 percent reduction of mining rewards, thereby causing a scarcity of coins. This subsequently leads to a surge in demand. The event is set to take place in May, but until then, the more conservative approach is short-term bearish but medium-term bullish.

Current Bitcoin Prices More Psychological Than Technical

Right now, BTC trade volumes are down globally as compared to last year. They match mid-2017 figures. It is probable that users are choosing to hold rather than trade in their cryptocurrency stash.

Current Bitcoin Prices More Psychological than Technical

Right now, BTC trade volumes are down globally as compared to last year.(Image Credit: CoinDance)

In a nutshell, the current market movement seems to be more psychological than technical as there doesn’t seem to be a direct correlation to demand.

(Featured Image Credit: Pixabay)

The post A Short, Medium Term Bitcoin Price Prediction appeared first on CoinCentral.

Source: Coin Central

BlockFi Review: Is BlockFi Safe, Legit, and Worth Your Time? 

With a 6.2% APY on BTC, the BlockFi Interest Account seems like a ray of sunshine for digital asset holders that have grown used to having their holdings slosh around with market volatility. Let’s explore in our BlockFi review. 

The BlockFi Interest Account:

  1. It allows users to earn competitive compound interest rates on their cryptocurrency (currently BTC, ETH, and GUSD). 
  2. Keeps cryptocurrency deposits secure. BlockFi’s cryptocurrency deposits are held by the Gemini Trust Company, regulated by the New York Department of Financial Services.
  3. It is available worldwide, outside of sanctioned or watchlisted countries. 
  4. Allows for anytime withdrawals. Users get one free withdrawal per month. 
  5. It offers simple and easy registration. 

The BlockFi Interest account is the only cryptocurrency storage option that pays substantial interest and offer rates that are competitive with most non-cryptocurrency interest rates. For example, high-interest savings accounts Ally Bank (1.6%) and WealthFront (1.82%) pale in comparison, although they are FDIC-insured, whereas BlockFi’s cryptocurrency deposits are not. 

BlockFi also offers loans backed by your cryptocurrency with a 50% LTV ratio. The following BlockFi review and interview is specifically for the BlockFi Interest Account, and not for the loan products. 

About BlockFi

BlockFi is a privately-held NYC-based lending platform founded in 2017. 

The BlockFi Team

BlockFi’s leadership team has decades of experience in the traditional financial services and banking world, and the company claims to take a conservative approach to regulation that will position it for sustainable long-term growth and expansion. 

Founder & CEO, Zac Prince has experience in leadership roles at multiple successful tech companies. Prior to starting BlockFi, he led business development teams at Orchard Platform, a broker-dealer and RIA in the online lending sector, and Zibby, an online consumer lender. 

Co-Founder & VP of Operations Flori Marquez has experience managing alternative lending products. In the marketplace lending industry, she helped build, scale, and optimize a $125MM portfolio for Bond Street (acquired by Goldman Sachs). As Head of Portfolio Management, Flori managed all operations from point of origination through to default and litigation.

Chief Risk Officer, Rene Van Kesteren spent over 15 years at BAML as a Managing Director of ML Professional Clearing / Prime Brokerage. During his time there, he built the equity structured lending platform, including risk and regulatory compliance frameworks. Prior to BAML, Rene worked as an equity derivatives trader in Caxton’s Strategic Quantitative Investment Division.

BlockFi Funding

BlockFi recently raised $18.3 million in Series A funding led by Valar Ventures (Peter Thiel-backed) with participation from Winklevoss Capital, Galaxy Digital, ConsenSys Ventures, Akuna Capital, Avon Ventures, Susquehanna, CMT Digital, Morgan Creek, and PJC. 

BlockFi on Crunchbase.

BlockFi has also raised earlier rounds by SoFi and Purple Arch Ventures.  

The team notes that they anticipate raising additional capital in the future to facilitate continued product development and rapid growth.

BlockFi Review: BlockFi Interest Account Review and Interest Rates

The BlockFi interest rates are fairly competitive, especially when compared to simply keeping your cryptocurrency on an interest-free exchange or wallet. 

  • Bitcoin: Users can earn up to 6.2% in annual interest on deposits under 5 BTC, and 2.2% on any BTC amount above that 5 BTC threshold. 
  • Ethereum: Users can earn up to 4.1% in annual interest on deposits under 500 ETH, and then 0.5% on amounts over that 500 ETH threshold. 
  • Gemini Dollars: Users can earn a whopping 8.6% interest on their GUSD deposits. 

The interest rates are paid in their nominal cryptocurrency. For example, you will earn 0.062 BTC on 1 BTC in a full year, provided the interest rate stays the same. This is a double-edged sword, of course, but if you’ve been in the cryptocurrency space for a while you’re no stranger to the pros and cons of owning a volatile asset. Your 0.062 BTC could either be more or less than its USD equivalent at the time of deposit, so plan accordingly. 

However, earning 8.6% on a stablecoin such as Gemini Dollar eliminates some of the volatility risks. $10,000 in GUSD will earn you $860 in GUSD for the full year, and since it’s pegged to the U.S. Dollar, you won’t have to be concerned about its price being drastically different (provided something catastrophic doesn’t happen to Gemini or its GUSD.) 

Please note that BlockFi charges flat withdrawal fees. which are subtracted from the total withdrawal amount. Users get 1 free withdrawal per month. 

How Does BlockFi Make Money?

At its roots, BlockFi is a spread business that makes money by borrowing capital at a certain rate (the interest rates it pays to users) and lends it a higher rate (the interest rates it offers for BTC/ETH/GUSD loans). 

A BlockFi blog post notes that the company primarily works with institutional counterparties to offer them liquidity. These borrowers consist of: 

  • Traders and investment funds that seek arbitrage trading opportunities in a fragmented marketplace. They borrow cryptocurrency to close mispricing gaps between exchanges or dispersed markets. Margin traders will borrow to fuel their trading strategies. 
  • Over the counter (OTC) market makers that connect buyers and sellers that prefer not to transact over public exchanges, often at a steep mark-up. These parties need to keep cryptocurrency inventory on-hand to meet demand. Since owning the cryptocurrency is very capital intensive and bears the risks of price volatility, OTC market makers will borrow from lenders such as BlockFi to facilitate their needs. 
  • Other businesses that need an inventory of cryptocurrency to provide their clients with liquidity. This category includes businesses such as cryptocurrency ATMs that keep the majority of their cryptocurrency assets in cold storage and need some level of liquidity to function on a daily basis. 

Is BlockFi Safe?

Based on our research and conversations, BlockFi passes the safety test. Well, it’s about as safe as Gemini, its primary custodian. Gemini keeps 95% of its assets in cold storage and 5% in hot wallets that are insured by Aon. 

Gemini is a licensed custodian and regulated by the NYDFS, and it recently received SOC2 compliance from Deloitte for their custody solution.

While BlockFi’s interest rates are appealing, it’s natural for cryptocurrency aficionados to be skeptical– and rightfully so, we tend to be a paranoid breed. That’s what this Blockfi review is for!

What happens to user funds during each of these scenarios? How are they protected? 

Even if we trust a business, which there is little to indicate BlockFi can’t be trusted, the doomsday “what if’s” hold primary real estate in our brains. 

We talked doomsday with the BlockFi team: 

BlockFi gets hacked?: “Gemini is BlockFi’s primary custodian and BlockFi doesn’t hold private keys directly. Gemini keeps the vast majority of its assets in cold storage and is insured by Aon. Gemini is a licensed custodian and regulated by the NYDFS. They recently received SOC2 Type 1 compliance audit from Deloitte for their custody solution. We encourage users to read more about Gemini’s security.

A user account is compromised?: “Since inception, BlockFi has not lost any customer funds. In the event that a user’s account is compromised, which our security protocols have caught in the past, we freeze the individual’s account for one week. Then, we conduct a Videoconference with the affected individual to verify their identity. We can then change their email address and password, so they can regain control of their account.” 

Suddenly everyone defaults on their loans?:  “When we lend crypto assets to generate yield, we have an extremely thorough risk management and credit analysis process. We only primarily lend to large, well-capitalized, institutional borrowers, or to counterparties willing to post collateral and provide the ability to margin call them on a 24/7 basis.”  

“What that means is, if we are lending $1M worth of BTC to Firm XYZ, Firm XYZ collateralizes the loan (typically ~120%) by giving us ~$1.2M USD. If the loan were to then enter margin call and the borrower was unable to provide additional collateral (default), we would use their USD collateral to buy crypto.” 

“We have actively lent since January of 2018, including throughout multiple periods of high volatility, without any losses across our entire lending portfolio. BlockFi is bound by NDA’s to discuss terms of specific borrowers/rates.”

How do I apply for a BlockFi Account?

Signing up for a BlockFi account is fairly effortless and can be done in under two minutes. 

  1. You can start right from this BlockFi review. Go to the BlockFi website
  2. Go to the “Earn Interest” option in the homepage slider, or “Get Started” in the menu. 
  3. Enter your email and make a password to create your account. 
  4. Enter the verification code sent to that email. 
  5. Once logged in, select “Deposit” to verify your identity and make your first deposit. 
  6. Enter your personal information for verification (part 1)
  7. Upload a form of ID such as a passport, driver’s license, or ID card and wait to be approved. 

How do I get in contact with BlockFi Customer Service?

If you’d like to contact BlockFi customer service, you can reach them at support@blockfi.com

So far, BlockFi support has been well above average. Let us know how your experience went was any different! 

BlockFi Interview

How is offering a 6% on BTC interest rate sustainable? 

“The interest we are able to pay is based on the yield that we are able to generate from lending, which directly correlates to the market demand in the space (I.e. what rate institutions are willing to pay to borrow specific crypto assets, as it varies from asset to asset). We are bound by NDAs to discuss specifics (institutions, specific rates, etc).” 

How about the 8.6% interest rate on Gemini Dollars? Can you talk about why Gemini?

“We are able to use stablecoin deposits to fund our consumer loans (average APR is ~10-13%) so we can afford to pay higher interest to GUSD / Stablecoin depositors.”

The BlockFi interest rate is subject to change on a monthly basis, could you explain why this is?

“Upcoming changes are announced typically 1-2  weeks prior to a new month, giving clients ample notice and time to prepare. The interest we are able to pay is a function of the borrowing demand. 

To date, our top tier BTC interest rate and GUSD interest rate have not changed. You can read more about why our rates are variable and how the lending market works here and here.” 

What happens in the case of a BTC/ETH fork? Will a user’s balance be credited with the forked coin as well? 

“Gemini is our custodian and has all of the information about what happens in the case of a forked network. Please refer to their user agreement here where you can read more about that.” 

What does the future look like for BlockFi? How will this BlockFi Review be different in a year?

“We’re confident that we will become a very large and successful company that provides financial services on a global scale to the benefit of millions of clients. We plan on going through three distinct growth phases based on our addressable market and products:

 

  • Phase 1 
    • Products for people who already own Bitcoin or another crypto asset that’s supported on BlockFi’s platform
    • Ability to earn interest borrow USD secured by your crypto
  • Phase 2
    • Expand the addressable market to include people who don’t own cryptocurrency yet.
    • Launch the ability to buy and sell on the platform and payments category products like a Bitcoin rewards credit card
  • Phase 3
    • Focus on global expansion and expand the addressable market to include users that may not ever want to own crypto
    • Heavily utilize stablecoins to provide traditional banking products on blockchain rails

Final Thoughts: Is BlockFi Legit? Is BlockFi Worth It?

All of our indicators for this BlockFi review (history, team, communication with support, and business model evaluation) point to yes: BlockFi is legit. There is very little evidence that suggests otherwise. There are a handful of negative reviews online from disgruntled users, but they mostly seem to be rooted in misunderstanding (ie. assuming the interest was paid in USD and not in BTC/ETH/GUSD). 

Whether or not BlockFi is worth it comes down to your risk profile and what you’re doing with your cryptocurrency. 

If it’s just sitting on an exchange, you may as well reap the benefits of compounded interest. 10 BTC would turn into 10.62 BTC in a year, a not insignificant gain of around $5,000 for the year. You would also receive the benefits or tragedy of Bitcoin’s price going up or down. 

However, it’s worth remembering that any time your cryptocurrency leaves your hard wallets, it’s exposed to a higher degree of risk. If BlockFi or Gemini were to experience some (highly unlikely) catastrophic hack, your cryptocurrency would be at risk. 

Our BlockFi review comes back positive. After speaking with team representatives, and with their support team on the client-side, we look forward to seeing BlockFi establish itself further in the space. Projects such as BlockFi simply existing provide cryptocurrency investors a much-needed diversification of revenue streams, something that die-hard HODLers have missed through the past few years. 


Editor’s Note/disclaimers: None of the above isn’t investment advice and is purely educational and entertainment. 

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Source: Coin Central

What Triggered the Recent BTC Price Surge, Beyond the Iranian Crisis

Tensions between the U.S. and Iranian administrations are believed to have triggered the most recent BTC price surge. Bitcoin prices surged monetarily on January 7 in anticipation of a situational escalation.

It led to some investors seeking refuge in safe-haven financial assets to hedge against an imminent calamity. Bitcoin rates spiked to $8,168, a new high in 2020 from $6,946 before cascading to sub $8,000 figures.

Iranians Didn’t Rush to Buy Bitcoin

Some crypto pundits have hypothesized that Iranians clamored for bitcoin in the face of rising tensions to safeguard their finances. This is as the saber-rattling with the world’s most formidable military power ensued.  

An analysis of top crypto exchanges, including LocalBitcoins, however, paints a different picture. Iranians didn’t scramble to buy bitcoin after the killing of Iranian Major General Qasem Suleimani. Far from it.

The latest trade volume data shows that buy-sell orders in the country have been at an all-time low in the past month.

An analysis of LocalBitcoins, however, paints a different picture.

The latest trade volume data shows that Iran buy-sell orders have been at an all-time low. (Image Credit: CoinDance)

Of course, it is possible that investors in other countries anticipated a BTC price surge and bought into the hype, but a global analysis indicates a similar trend. So, what caused the sudden change in trajectory?

BTC Price Anticipation and Investor Sentiment

Looking at crypto exchanges alone can’t provide a clear picture of what’s really going on within the markets. Other underlying factors, such as market-sentiment within investment circles, have to be taken into account.

According to a research report published by Research Gate, an increase in the number of texts posted on Telegrams crypto investment groups often correlates closely with market movements. A spike in chatter is usually a positive price-action indicator that typically manifests within a week.

This assertion has been supported by long short-term memory (LSTM) neural network analysis models. It was previously thought that Google Trends volume changes could be used to predict crypto prices accurately.

Telegram groups have, however, proved to be the more reliable indicator. An analysis of Monaco Crypto Trading, the most popular digital currency investment group on Telegram, reveals an uptrend in chatter as U.S. – Iran tensions rose.

Telegram groups have proved to be a reliable indicator.

An analysis of Monaco Crypto Trading, the most popular digital currency investment group on Telegram, reveals an uptrend in chatter as U.S. – Iran tensions rose. (Image Credit: TGStat)

In a nutshell, there was no inherent demand for cryptocurrencies per se during the most recent bitcoin price hike. The anticipation of rising demand is more likely to have caused the price upswing.

The post What Triggered the Recent BTC Price Surge, Beyond the Iranian Crisis appeared first on CoinCentral.

Source: Coin Central

Donald Trump’s Senior Economic Advisor is Working on a Stablecoin

There’s at least one blockchain bull in Washington D.C. 

Stephen Moore currently serves as Donald Trump’s senior economic adviser. Moore played an instrumental role in the writing and passage of the Tax Cuts and Jobs Act (2017) and briefly entertained a Trump nomination to serve as a governor of the Federal Reserve and help manage the nation’s currency (Moore would withdraw his name from consideration.) 

Moore, a self-ascribed policy geek, counts over 35 years of working in public policy. During this time, Moore was also on the Wall Street Journal editorial board, Fox News Channel, and CNN as a senior economic analyst. 

Worth Magazine ranked Moore as the 32nd most powerful person in global finance. In 2018, Moore met the Founder and CEO of Frax (then Decentral Bank) Sam Kazemian at the SALT conference, a bi-partisan investment conference hosted by Former White House Director of Communications Anthony “The Mooch” Scaramucci. Kazemian is the co-founder of Everipedia, a for-profit Wikipedia “fork” that uses the EOS blockchain and incentivized content creation using a cryptocurrency token called IQ. 

Today, Moore serves as the Chief Economic Advisor of Frax, a decentralized fractional-reserve-based stablecoin. By its nature, Frax will compete with central banks by offering a stable digital alternative. 

We connected with Moore and Kazemian to discuss the future of stablecoins, the current political climate surrounding blockchain and bitcoin, and how the Frax team aims to establish Frax as a widely adopted digital asset.  

What does the role of Chief Economic Officer at a cryptocurrency project look like? 

Moore has spent the bulk of his career advising politicians and rallying stakeholders in advocacy of lower taxes and decreased government spending. As a senior economic advisor to Trump, Moore helped work on overhauling the US tax policy, which was passed into law by Congress in 2017. 

Today, Moore is dedicated some of his schedules to something out of the immediate wheelhouse of most in Washington: advising a blockchain startup on its creation of a stablecoin.

“One of my roles is to make sure Frax grows and grows into billions of dollars but keeps a stable value,” says Moore.

Moore also wants to help Frax escape and better navigate a murky regulatory atmosphere. 

 “Another role is to help the company navigate this undefined regulatory climate,” says Moore. “We don’t know what regulations are coming but we know there are regulations coming.  It’s not much an economist role but I’ve been in Washington for 35 years and I know how these agencies work. Regulatory agencies might try to slam the door shut on a lot of these cryptocurrencies and we want to find a way to prevent these currencies from being shut down.” 

What’s it like being a proponent for blockchain and digital assets in Trump’s administration? 

“Trump administration has had some skepticism,” comments Moore. “Not hostility, but skepticism. We want to work with the administration and ease some of their fears. Stablecoins and blockchain are not something that will blow up the economy. It should be viewed as an asset or a liability.” 

“People inside the Trump administration are intrigued. One role I’ve helped play is to increase the visibility of blockchain and digital assets. They raise objections and complaints, and I try to talk them down from the ledge. I view this as the Internet age where the government can’t stop progress. I think crypto and digital currencies are the next big thing.” 

You can’t stop technology. Let it proliferate, let people use it, and let it become the Wild West. It would be very advisable for the Trump administration to let people work this out and make their own decisions. Regulators are trying to solve yesterday’s problem and far away from the curve of solving where the best things are.”  

“Early adopters will realize its potential. We’re at a stage where 95% of people probably don’t know what it is.”

Will cryptocurrency be a topic for future Presidential elections?

“2020 no,” comments Moore. “2024 yes”

Why does the world need another stablecoin?

Frax differentiates itself from other stablecoins as an algorithmically managed reserve of cryptocurrency and digital bonds.

“We’d like other stablecoins to continue growing so we can use them as collateral to back Frax,” notes Kazemian. “We’re not another Tether or Maker clone that over-collateralized Ether.” 

But why now? Kazemian looks at the industry’s progress in the past few years as extremely productive in setting the foundation for decentralized finance. 

“I don’t think something like Frax would have been possible until the industry grew into what it is today,” says Kazemian. “Money markets like compound.finance have hundreds of millions of loans coming in. People are paying interest on those products. Tether and Dai getting a strong foothold. Tether is the fifth-largest cryptocurrency by market cap. Also, the psyche in the industry has changed that stablecoins are an important part of the ecosystem. We needed the whole atmosphere to change.” 

There is nearly $700 million locked in loans locked in decentralized finance (DeFi) contracts.

“To me, Bitcoin isn’t really a currency; it’s a commodity,” says Moore. “A speculative commodity at that. I’m not saying that to be negative. A currency retains its value over time without going way up and down in value.”

“A recession or a bear market is just a bull market for stability,” says Kazemian. “What happens when prices go down? Everything flees for the dollar. Just by logic, when there’s a bear market on one end, there’s technically a bull market for what the assets are priced in. It just makes sense. We’re seeing the same thing in crypto. Seeing utility coins and shitcoins plummet, and stablecoins like Frax are there to give investors stability and sound value.” 

What are your plans for user adoption? What does the stablecoin need to succeed?

“We view it as a multi-layered approach,” says Kazemian. “In order for Frax to grow, it needs institutional or exchange backing so people can actually use it. The second phase is once people can get access to Frax, we’ll start figuring out how to get out to the general public. We’re looking into more retail-based things like Robinhood or Cashapp and slowly move into the consumer space.” 

What’s in it for you guys?

“With most decentralized coins, there’s a 2 token system,” comments Kazemian. “People who want exposure to growth hold the volatile token. Frax works the same way. Frax shares (FXS), those tokens are hopefully going to be worth a lot. They work in a similar way. The total value of frax shares is the DCF [discounted cash flow] of all fees paid in Frax. Part of the shares has value in the entire system. It’s pretty exciting because it’s like having shares in a decentralized central bank. The original shares generated are distributed to the founding team and investors, partners– similar idea to MakerDao token.” 

Much of Moore’s blockchain support seems to be rooted in his strong Libertarian leanings. 

“I want the government to know as little about me as possible,” says Moore. “I think millions of people are like me around the world. The idea you can have a currency that’s not monitored or controlled by the government is very valuable. You can’t discount the value of a decentralized currency.”

Why peg Frax to the Dollar?

“If the value of the USD changes, we’d have to wonder about how to update the protocol to follow another peg,” says Kazemian. “It’s possible in terms of software. I can’t see a world where the USD doesn’t lose its value.”

“This is a great question,” says Moore. “Is the dollar the best thing to peg this to? There are flaws in many currencies. I lived through the 70s where we saw 15% rates of inflation. What else would you want to peg it to? One idea we thought about was pegging it to the price of gold, but it fluctuates more than the dollar. Many currencies have had much bigger peaks and values over time. It’s the best choice out there. The Dollar is simply the least rotten apple in the bunch” 

The team sees Frax co-existing and even supporting the U.S. Dollar. 

“Frax helps solidify the dollar’s role as the world currency,” comments Moore. “We see Frax as a digital world reserve currency.”

“Since Frax is pegged to the U.S. dollar, it’ll help keep it relevant,” says Kazemian. “You can move the same dollar value using a blockchain infrastructure. We’re not trying to do a weird floating currency like Libra that has a unique exchange rate to the USD. We’re actually excited because it’s a very American project.” 

Hypothetically, can Frax be shut down?

There’s nothing illegal about what we’re doing,” comments Moore. “There would be a lot of problems for the government trying to shut down. It’s a legal product. Government regulators recognize it’s a clear and present danger to their current status. They will try to figure out a way to slow it down. Government regulators, especially when it comes to technology, are always like three chess moves behind the industry.” 

“In a hypothetical world, it’s a decentralized financial product,”  adds Kazemian. If they try to take out Satoshi after they release code, people are already running it.”

In other words, once the cat is out of the bag, you can’t put it back in.

How will governments react to a widely adopted stablecoin?

According to Moore, stablecoins can serve as an important policy function that isn’t recognized by the people in policy powerhouse cities like Washington, Brussels, Tokyo, and so on.

“These cryptocurrencies will have a very disciplining effect on government currencies,” comments Moore. “As Sam was saying, there’s a saying good money drives out bad money. People are going to flow to the currency they trust. People flee to the dollar, which forces other countries to think twice about devaluing their currency.”

The large number of viable substitutes that exist, the less likely governments will be able to manipulate their currencies outside of the best interest of the public.  

“When countries get into a debt crisis, they try to depreciate the debt currency and then try to pay back debtors,” explains Moore. “It’s a way of screwing over the debtors. Now, when you’re going to have currencies like Frax out there, you’re going to see a migration to more transactions being done in Frax instead of itself.” 

The availability of substitutes such as Frax and other stablecoins is going to make it difficult for central bankers to successfully inflate or deflate a country’s currency.

“It’s going to force central bankers that they will have to keep their currencies stable. Markets will instantly punish them for not. Over time, you can see some of these debts paid back in Frax instead of a certain currency.” 

Is stability necessarily always a good thing?

“Stable currency is optimal,” says Moore. “You always want your currency to be level in value. We know from history for hundreds of years, high inflation and high deflation can have negative consequences for an economy. It gets back to Economics 100: why do you have a currency in the first place. If it doesn’t retain its value, people will use other things to trade with.”

Final Thoughts

To learn more about Frax, check out the first version of the whitepaper on Frax.finance. Currently, the team is testing some of the smart contract features on EOS and planning Ethereum integration.

It’s estimated Frax will be available on the market at some point in 2020.

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Source: Coin Central