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Hyperledger Gaining Momentum, Poised for Major Move

Blockchain platforms designed for advanced processes, such as smart contracts and decentralized applications (dApps), are seeing a significant uptick in adoption, as a wide range of organizations recognize what the technology has to offer. Although Ethereum is considered the leader in this space, Hyperledger is now becoming a significant rival. This fact may be surprising to many crypto advocates, who have long overlooked Hyperledger due to its permissioned architecture and close ties to corporate interests.

By any measure, Hyperledger has been having a good year. It has continued to grow its capacity, and has become one of the few blockchain platforms to see notable real world use. In fact, dozens of institutions now use it in areas ranging from logistics to finance. These include some of the largest businesses in the world, such as Walmart and Samsung, as well as public entities like Dubai, which will use the platform for its smart city development. In fact, according to Forbes, of the fifty largest entities that have deployed blockchain technology, half are using Hyperledger.

It is important to note that the Hyperledger ecosystem is extremely large, and continues to grow. Although the platform has been developed by the Linux Foundation, many very large technology companies have played a role in various divisions. This gives Hyperledger a wealth of talent and capital to innovate and find unique use cases. It also opens the door to substantial number of partnerships and potential users. 

IBM is perhaps the largest corporate player, and has developed Hyperledger Fabric. This framework within the Hyperledger network is the most direct competitor to Ethereum and other dApp platforms. Big Blue clearly expects Fabric to play a major role in the blockchain space, and to that end is pouring tremendous resources into it. Other corporate codebases include Hyperledger Sawtooth, developed by Intel, and Hyperledger Iroha, developed by Hitachi. 

There are also moves underway to link Hyperledger to existing permissionless platforms. Notably, the Iota Foundation has just announced a partnership with the Linux Foundation that will include collaboration with Hyperledger to create an array of interoperability standards for hardware and software for Internet-of-things applications. Hyperledger has been working with the Enterprise Ethereum Alliance on similar issues for over one year. 

There is, of course, no shortage of criticism toward Hyperledger, most of which is based on the fact that it is a permissioned platform. Node operation is not open to the public, and the entire ecosystem, with few exceptions, is tightly regulated by the consortium’s members. In other words, it lacks the true decentralized architecture that makes distributed ledger technology so revolutionary. Whereas there are specific use cases for permissioned blockchains, their ability to offer the same immutable consensus and secure exchange of data is limited, at best.

To a certain extent, it may be Hyperledger’s centralized nature that is helping it to gain users. Despite its technical limitations, institutions entering the blockchain space trust corporate players such as IBM to deliver on their promises. The same phenomenon can be seen among permissionless platforms, as those with strong development teams that have retained a degree of control seem to be gaining far more traction in the real world. Simply put, the fact that trusted entities are behind its success is a strong incentive to use it. 

The growth of the Hyperledger project is a clear example of the tremendous diversity that exists within the blockchain space. It is a reminder that the blockchain revolution is still in its early stages, and the platforms that will succeed long-term have yet to be defined. Hyperledger may not fit the definition of a true, open distributed ledger. Nevertheless, its backers are clearly preparing for mass adoption and use across a multitude of global sectors.

 

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Source: Crypto News

Germany is Considering the Advantages of Launching a Digital Euro

Over the last couple of years, numerous countries worldwide have issued statements concerning their plans for developing central bank-backed digital currencies (CBDCs). CBDCs are basically the direct response of governments to cryptocurrencies as we know them. After all, if the digital currency market is here to stay, countries want to preserve their national fiat currencies for as long as possible, before losing control of the financial market as we know it.

German finance minister advocates for digital euro

According to recent reports, Germany, which has often been referred to as the financial engine of the European Union, might be considering the idea of working on and launching a digital version of the Euro. This rumor has floated around the web before, yet a recent statement made by the German finance minister and vice-chancellor, Olaf Scholz, proves that the Digital Euro is indeed, a solid idea.

In a recent press statement, given to WiWo, a German business magazine, the finance minister stated that a digital Euro would be great for the financial centre of Europe, and its overall integration into the worldwide financial system. The main argument behind this is that “We should not leave the field to China, Russia, the US or any private providers.” This is definitely understandable, granted that many of the world’s countries are actively researching and working on developing central bank digital currencies.

Launching a digital euro is considerably more difficult, as opposed to, let’s say, launching a digital yuan. The main reason for this is that EU-member countries willingly chose to adopt the euro as their national currency. Therefore, mass-consensus from euro countries needs to be obtained and then edited into the local legislative framework.

What other international actors are doing

China is very likely to release a digital version of the Yuan next year. Recent reports indicate that the development of the CBDC is on-going, although most other details regarding the coin are unknown at this point in time. The same goes for Russia, where despite an unfriendly stance towards cryptocurrencies, research into CBDC development is also being carried out.

So far, there are no reports concerning a digital version of the dollar, released at the federal level by the United States of America. However, if the trend continues, it is highly likely that the US won’t stand idle while other countries are successfully releasing CBDCs.

As highlighted earlier, the German finance minister also mentioned digital currency development by private entities. Most likely, he referred to Facebook and their upcoming Libra coin.

Keeping the status-quo

CBDCs sound promising, since they take an existing and well-reputed fiat currency and make it digital. Basically, the system does not change, yet using it becomes easier. From this point of view, there is nothing wrong with state-issued digital currencies.

However, the cryptocurrency market has shown us that there’s potential to do better. If we choose to live in a world driven by money, it is best for people to have complete control over the money in question. This is ensured through the common principles associated with cryptocurrencies in general: security, privacy, decentralization, and transparency. These are all attributes that a state-backed coin cannot support because of how the traditional financial system is built.

Furthermore, cryptocurrencies also offer users the ability to pay for any product/service, anywhere in the world, without needing to exchange the said coin into a locally-accepted currency. Last but not least, digital currencies also feature large value potential, way above the traditional interest rates offered by banks. As such, storing your savings in a digital currency creates wiggle room, thus allowing your investments to rise overnight according to market price changes. This also creates considerable risk granted the volatility of the cryptocurrency market, yet this risk can be easily mitigated by keeping a diversified portfolio or storing your funds via a stablecoin that’s tied to another value.

Conclusion

Based on everything that has been outlined so far, CBDCs are certainly promising, despite their numerous drawbacks when compared to cryptocurrencies. On the other hand, we have never experienced a fully-fledged CBDC in the wild, so it is too early to pass the final judgment. Lastly, regarding the numerous CBDC development efforts, governments worldwide are just following the herd since no country wants to be left out.

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Source: Crypto News

Platform Partnerships with Institutions at All-Time High, Market Values Remain Flat

Evidence of blockchain technology’s move into the mainstream is emerging everywhere. A wide range of businesses are rapidly embracing it, and crypto use is growing, notably in the developing world. A clear sign of progress is the increasing number of partnerships that have been forged between development teams and a broad away of institutions. Many of these collaborations have remarkable potential, and lend tremendous legitimacy to their respective blockchain platforms, yet they have done little to move market values. 

Cardano (ADA) is the most recent platform to announce a notable partnership. Shoe maker New Balance will be using Cardano to fight counterfeiting. Customers will soon be able to trace the origins of their shoes to ensure that they are authentic. 

Not long ago, news of adoption by a major corporation would cause a platform’s market cap to dramatically rise, yet Cardano’s price has barely moved. In fact, it is trading lower than it was a month ago. This phenomenon is the same for other altcoins as well. Ikea has just received the first payment via an Ethereum smart contract, and the market has barely noticed. The Iota and VeChain teams are now regularly announcing new adoption measures, yet the prices of their respective coins have remained mostly stagnant. 

There is no single explanation as to why positive news no longer has much impact on value, yet investors are clearly much more risk averse after the price declines of the past eighteen months. Would-be investors are expecting a much greater degree of use and adoption. Also, crypto advocates are now much more skeptical of the marketing, technical, and regulatory status of specific platforms.

Bitcoin’s uncertain status is also likely a contributor to the reticence of investors to jump back into to the alt market. The flagship cryptocurrency’s recovery has clearly stalled, and critics of its ability to ever become a mainstream medium of exchange are becoming more vocal. It is reasonable to assume that until there is more clarity on the status of Bitcoin the entire crypto market will remain somewhat depressed.

The present market status makes it clear that altcoins continue to rise and fall collectively, and the blockchain space has yet to mature enough for individual platforms to perform independently to any great degree. More importantly, despite clear steps toward mass adoption, putting a specific value on individual altcoins is extremely challenging. This fact is not surprising given the fact that the vast majority of crypto investment remains little more than speculation and trading. 

Given the remarkable progress taking place some platforms are all but certain to experience significant market growth. The only real question is whether or not their price breakouts will be individual, or part of a much larger recovery of the altcoin space. In either case, this is a very unique, and likely temporary, time in the blockchain revolution where there is no clear correlation between mainstream progress and market value. It is unlikely to last for much longer.

 

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Source: Crypto News

Ikea Allows Use of Ethereum Blockchain for Invoice Payments

During the last couple of years, Ethereum use cases have increased exponentially in countries throughout the world. Recent reports indicate that a few days ago, IKEA Iceland was happy to use the Ethereum blockchain, in order to settle an invoice it had with a local retailer. To put things into perspective, the transfer was facilitated by Tradeshift, a supply chain payments company. The transfer was therefore made using a digital version of the Icelandic króna that was based on the Ethereum blockchain. This ETH-supporting e-króna was created by Monerium, a start-up backed by ConsenSys.

The Ethereum blockchain and smart contract-based transfer was announced via a press release published by Monerium. According to the Monerium CEO, “As the first company authorized to issue e-money on blockchains, we are delighted to demonstrate the benefits of blockchains for mainstream B2B transactions using a legal form of digital money.” With this in mind, the transfer was possible thanks to a regulatory framework allowing Monerium to issue digital fiat on the Ethereum blockchain, for usage within the European Economic Area. Based on this, the e-krona used for the transfer had actual value and was simply a digital version of the fiat currency. This differentiates it from traditional digital currencies, which are known for their decentralization, and for having no link to fiat-based payment systems.

This event marks one of the first use case scenarios where a public company settles an invoice by leveraging a digital fiat currency alongside smart contracts, on top of the Ethereum blockchain. In general, this technology can be leveraged to facilitate significantly quicker payment settlements, lower transaction costs, more transparent transactions, and of course, safer payments. According to the Monerium CEO, “E-money is a proven digital alternative to cash, as it is regulated and redeemable on demand”. This is certainly a thought-provoking question, as it leads us to wonder whether digital cash would be a better alternative when compared to digital currencies. There are opinions both in favor and against this claim – the general consensus of the cryptocurrency community is that we should use decentralized, cryptographic and transparent methods of digital payment. In most cases, e-cash does not meet these criteria.

 

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Source: Crypto News

Debate Is Heating up over Bitcoin Price Manipulation

Bitcoin’s decline in value late last month caught many by surprise, as the launch of Bakkt and other positive movements in the crypto space were expected to trigger substantial upward price movement. The fact that Bitcoin’s value is volatile and does not follow traditional wisdom is well known, and there has long been rumors of price manipulation. There is now debate over whether this current price drop is a result of such illicit activity, or if it is a reflection of natural market forces. 

A recently published report by Arcane Research notes that the Bitcoin price routinely drops shortly before the Chicago Mercantile Exchange (CME) monthly futures contracts expire. This pattern has existed since January, 2018 and the writers assert that the timing and volume of decline are too significant to be mere coincidence. The report explains a number of scenarios where manipulation may be at work, but notes that concrete proof has yet to be uncovered. 

This present claim is the latest in a long line stretching back several years that finger various entities as artificially raising or lowering the Bitcoin price via subversive means. For example, last year the U.S. Justice Department opened an investigation into Bitfinex, which stands accused of manipulating the value by creating hundreds of millions of Tether tokens. Stories also abound of groups that use highly sophisticated quantitative analytics to cause volatility, or of large Bitcoin holders, known as “whales,” coordinating major sell-offs to collapse the price, only to re-buy at a discount. 

The assertion that Bitcoin is subject to price manipulation is bolstered by the fact that such practice is rampant among altcoins. Wash trading, pump and dump schemes, and exit scams have become common, particularly among the lower valued alts. The fact that the crypto markets are largely unregulated, and operate outside of the traditional financial space, also makes fears of manipulation more believable.  

Should the value of Bitcoin be subject to manipulation tactics, ending them will not be easy. Blockchain architecture is designed to resist centralized regulation, and thus laws designed to enforce fair play will be very difficult to enforce. In fact, given the nature of crypto markets, it is even difficult to determine which actions are presently illegal.

The importance of this issue is further evidence of the need for states to take greater steps toward recognizing cryptocurrency as legitimate assets. There are many elements to the fight against manipulation, and lack of legal recognition by most governments only makes these subversive actions more successful. Whereas the extent to which cryptocurrency should be regulated is hotly debated among crypto advocates, all agree that for this new asset class to gain mainstream use, investors must have faith in the fairness of the platforms.

More research is sure to be conducted on the CME’s relationship to Bitcoin prices, and soon a more definitive answer is likely to emerge on this topic. Regardless of the outcome, as the crypto market becomes more valuable, manipulation techniques will become more difficult. Overall, however, it is all but certain that actions designed to fix the price of these assets will remain a part of the space.

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Source: Crypto News

Stablecoins Are Growing & Creating Their Own Niche Within The Crypto Space

Wells Fargo has become the latest financial institution to announce the creation of a stablecoin, which it intends to use for cross border transfers and international payments. As digital tokens backed by hard assets, usually fiat currencies, stablecoins are quickly carving out their own place within the crypto space. Their emergence has sparked significant debate among blockchain advocates, and their ability to succeed long-term is questionable. Nevertheless, they are likely to become more influential as digital currencies move toward mainstream use.

Private blockchain developer R3 is behind the Wells Fargo coin, which will be named “Wells Fargo Digital Cash.” It will be based on a permissioned platform, and is expected to launch in 2020. This coin will likely be similar to the JP Morgan Coin, and is expected to be used only by banks during its initial roll out. Wells Fargo claims that it will be much faster, and more efficient than the SWIFT Network, which has long been the standard service for international institutional transfers.

The stablecoin space has now become so diverse that it can be difficult to determine the goals and architecture of each platform. Some, like Tether, are primarily used for trade and are backed by new companies. Others, like JP Morgan Coin, are intended for institutional use by banks. Libra, which will soon be launched by Facebook, is designed for use as a traditional currency.  

Most crypto advocates assert that stablecoins should not be considered cryptocurrencies, as they lack the core elements of true blockchain-based assets. Notably, they are centrally managed, and many do not maintain consensus via a distributed ledger. In fact, most are not open source or immutable. 

Creators of stablecoins counter argue that these assets presently play a key role within the crypto space, as they are used on exchanges and as safe havens for crypto investors during times of volatility. Also, stablecoins can be every bit as effective, if not more so, as means to transfer value and they offer a degree of stability that traditional cryptocurrencies lack. In fact, the entire blockchain space is rapidly evolving, and there is no single platform architecture that meets all needs. In other words, there is no reason to exclude stablecoins from the blockchain revolution. 

Most governments remain opposed to widespread crypto adoption, yet moving forward regulators and politicians may be more likely to embrace stablecoins, as these assets can more easily be regulated. Although the hostility toward Libra and Tether are well-known, stablecoins issued by banks seem to have less opposition. Notably, there has been virtually no opposition to JP Morgan Coin, Gemini, or Wells Fargo’s proposed coin. It seems, not surprisingly, that politicians are somewhat biased toward the various institutions that are entering the stablecoin market. It is thus not surprising that Facebook is presently working hard to gain the trust of U.S. leaders. 

Despite their controversial nature, the development of stablecoins is likely to continue unabated. Their future may be uncertain, but the same can be said of any of the more conventional cryptos. For now, their supporters firmly believe that these assets have a very real role to play in the world of digital currency.

 

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Source: Crypto News

Iran Sending Mixed Signals on Cryptocurrency Legalization

Global leaders are beginning to accept the fact that cryptocurrency represents a significant threat to the economic status quo. Responses have been mixed, with many nations sending confusing signals over crypto legality and regulation. Iran is one of these states, as it has recently taken moves both hostile and supportive of blockchain asset development. 

It is easy to see how crypto adoption could be a problem for the ruling Iranian government. The economy is already severely weakened, largely due to the crippling international sanctions that have been in place for several years. Tax revenue is down and the budget deficit is rising. Iran’s ruling regime has long struggled to squelch calls for greater democratic reforms. Thus, cryptocurrency use could further reduce the power of the nation’s leaders to maintain economic and social control. 

In July, Nasser Hakimi, a technology official for Iran’s central bank, announced that trading Bitcoin is illegal, equating its use to money laundering. He also warned the public against scams and pyramid schemes associated with crypto investment. Shortly before this announcement Iranian authorities had confiscated one thousand mining rigs associated with two separate mining farms.

Despite this open position against cryptocurrency, the Iranian government has realized that blockchain assets offer a means to evade the sanctions that have caused so much economic stress. Iranian officials have acknowledged this fact, and asserted that the United States is actively working to block its access to Bitcoin and other cryptos. Now, its position on the legal nature of decentralized digital currency seems to be shifting. Iran is opening the door to mining, issuing regulations and offering tax incentives for overseas mining profits to be brought into the country. 

Iran is far from the only country to have confounding positions on blockchain development, but its actions in this space are likely to have a serious impact on global affairs. Tensions are escalating between it and its neighbors as well as with the West. The United States is likely to take more aggressive steps against the rogue state in coming weeks, which could draw considerably more attention to the cryptocurrency issue. Also, Iran’s actions could give significant credence to anti-crypto members of the U.S. Congress who have long warned of the dangers of crypto use by hostile nations. 

Any benefits that Iran hopes to gain from embracing cryptocurrency will only be sustainable if it fully legalizes its use, which will include trading and using it as legal tender. It is folly for Iran’s leaders to assume that citizens will mine Bitcoin and yet choose not to transact with it. Also, non-mineable crypto platforms must also be accounted for, which are also being acquired across the country. Perhaps there is hope that Iranians will eventually begin using the state-backed digital currency which is currently under development. 

The current situation with Iran is a clear example of how the Blockchain Revolution is changing the means by which nations resolve conflicts. By decentralizing economic power, it is giving Iran an advantage in its struggle against its rivals. Nevertheless, Iran must fully legalize it in order for these benefits to succeed long-term.

 

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Source: Crypto News

Etihad Airways Embraces Blockchain for Distribution

The big players in the aviation industry are quite eager to use blockchain for day-to-day use cases to make their operations more efficient. In a recent move, Etihad Airways has teamed up with Winding Tree, a blockchain platform targeting the travel industry. The primary goal of this partnership is to explore and implement use cases for making the airline’s distribution more swift.

With that move, Etihad has now joined the elite club of World’s top airlines using the Winding Tree platform, including KLM, Air Canada, Lufthansa, and Air France. As a result, transaction and operational costs for every stakeholder in the process are expected to be reduced greatly. Moreover, they will also be able to manage and share inventory details publicly and collaborate at a much larger scale.

Officials from both sides of the deal, Etihad Airways and Winding Tree, are keen to bringing disruption in the market. Although they are primarily looking to serve distribution-related use cases, it might lead towards a fully ‘blockchain-empowered’ industry in a couple of years. Since the current niche is dominated by a monopoly of major distribution systems, Winding Tree aims to bring the real sense of decentralization among all the participants. This step will further diminish the cost for end-users and allow the airline to grow its operations.

It is worth noticing that Winding Tree’s blockchain is a fully public ledger and the API is also available to all partners, allowing them to build customized solutions while taking advantage of blockchain’s inherent features (e.g. data integrity, provenance, etc).

 

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Source: Crypto News

Know-Your-Customer Regulations Are Stirring Fierce Debate Within The Blockchain Space

Cryptocurrency is rapidly moving into the mainstream financial space, and many of the largest crypto exchanges are seeking greater legitimacy and trust from regulators and politicians. Increasingly, these exchanges are enacting know-your-customer (KYC) protocols on their platforms, ostensibly to please these leaders. This move is fueling a heated debate among crypto advocates over the future of blockchain assets, and the role centralized authority should play within the space.

Binance is the latest major exchange to strengthen its KYC requirements. Its recent exclusion of Americans from its main site and subsequent creation of a separate exchange for the United States is specifically designed to block U.S. citizens from anonymous trading. The newly launched Binance.US will require all users to positively identify themselves with a government ID and their social security numbers. 

Not surprisingly, Binance has drawn the ire of many American traders who would rather not have their names associated with their crypto activity. Such information can be used by the IRS to force tax compliance, as has been the case with the user data from Coinbase. Also, KYC data can be leaked. In fact, Binance’s own databases were hacked earlier this year and thousands of users had personal details released on the dark web.

Conversely, some crypto advocates support moves by exchanges to enhance user identification. They assert that blockchain assets will not be embraced by institutional investors or the general public until compliance with standard financial regulations is in place. In other words, crypto will never go mainstream without KYC enforcement. 

Regardless of where one stands on the KYC debate, there are plenty of exchanges that still do not require it. It will be very difficult, if not impossible, to shut them all down or force them all into compliance. In fact, many smaller exchanges do not have the resources to maintain a robust identification process. Additionally, decentralized exchanges, which by their very design operate anonymously, continue to grow in popularity.

A few exchanges are also beginning to delist privacy-oriented crypto platforms. OKEX is delisting five, including Dash and Monero, citing Financial Action Task Force (FATF) rules that require sender and recipient data. Coinbase recently dropped zCash from its UK branch for the same reasons.

The extent to which crypto traders will comply with know-your-customer requirements long-term remains uncertain. Exchanges that rigidly enforce it, such as Bittrex and Bithumb, seem to be thriving, yet things may change once crypto becomes a greater element of the global economy. In addition to the issue of taxation, some governments may seek to ban crypto and punish its users, as has been proposed by lawmakers in India and the United States. Such moves would almost certainly lead to traders abandoning any exchange that seeks to identify them.

For now there remain many exchanges with lax, or non-existent, KYC rules. Given the present volatility of the crypto space, it is difficult to determine how this situation will eventually play out. Also, the debate over how anonymous crypto trading should be is only beginning, and is all but certain to become much more complex, and controversial, as blockchain assets gain mass use.

 

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Source: Crypto News

Mastercard & R3 to Work Together on international Blockchain-powered Payment System

The world of finance is growing more and more automated, with major payments provider Mastercard and R3, a growing blockchain development company having made a joint announcement about their partnership through a press release on the 11th of September.

They hope to put their forces together and create a pilot program that will improve connections for banks, payment infrastructures, and financial schemes. The pilot program will be supported by Mastercard’s clearing and settlement network.

Mastercard supposedly has a “multi-rail” strategy that is going to increase the options for their customers in regards to moving money. The pilot is expected to lower payment overhead costs, increase liquidity, and improve the standards and protocols between banks and domestic clearing systems.

In addition to these benefits, Mastercard announced that new “value add” services will become available for their clients as a result of the partnership with R3.

Peter Klein, executive vice president of the new (as of yet unnamed) payment platform for Mastercard and David E. Rutter, CEO of R3, both left their comments about the partnership.

Mr. Klein explained that the development of new and better cross-border B2B payment solutions will improve worldwide connectivity in the account to account sector, and that is precisely Mastercard’s ambition. He added: “Our goal is to deliver global payment infrastructure choice and connectivity as demonstrated through our recent strategic acquisitions and partnerships, including our relationship with R3.” He also added that this partnership reaffirms their commitment to innovation, on the home-front and as a result of the partnership itself.

Mr. Rutter’s comments shared his excitement to partner with Mastercard and to help with the development of the digital payments industry. He said: “All institutions – large or small – rely on the ability to send and receive payments, but all too often the technology they rely upon is cumbersome and expensive.” He ended his comment with a correlation between Corda and cross-border payments. He explained that Corda is built for enterprise use cases just like this one and that he and R3 are looking forward to bringing blockchain closer to the existing payments businesses around the world.

We reached out to the media contacts listed in the press release and asked them a few specific questions. We wanted to know about their estimates for when the pilot program will be launched, about the differences between the current system and once the pilot program is implemented. We also asked, what the new “value add” services are going to be, and whether they will provide support for banks when communicating the idea of implementing their solution with the domestic clearing system.

To wrap everything, we also want to know if banks and domestic clearing systems will be required to join the R3 consortium in order to take advantage of the technology.

 

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Source: Crypto News