Day: March 12, 2018

A central bank-issued digital currency could fuel faster bank runs during periods of financial stability, the BIS said Monday.

This article originally appeared on Bitcoin Magazine.

Anonymous blogger @Bitfinexed purportedly has retained a D.C. lawyer as defense against lawsuit threatened by Bitfinex in December. #NEWS

South Korea’s ban on initial coin offerings (ICOs) could be relaxed in the months ahead, according to a new report.

As of late, the Indian government has expressed keen interest in developing countrywide blockchain initiatives, but top officials are not too fond of cryptocurrencies themselves. Moving ahead, the country has been weighing its options, but some, like Shaktikanta Das, who heads a financial commission tasked with looking at cryptocurrencies and other financial matters, are asserting that regulation is too difficult to implement and properly enforce.

Looking Back

In early February, finance minister Arun Jaitley stated in his budget speech that the Indian government “does not recognize cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system.”

So far, only two committees in the finance ministry have actually tried to understand and recommend regulations for cryptocurrencies. The first committee, set up in April 2017 under Shaktikanta Das, who at the time was secretary of economic affairs, was dead-set against allowing cryptocurrencies in India from the start. The second panel, headed by Subhash Garg, the current secretary of economic affairs, is still weighing its options.

This seeming aversion to cryptocurrencies began several years back in 2013, when India’s central bank, the Reserve Bank of India (RBI), cautioned users against potential security threats. But these warnings, paired with the warnings from the finance ministry, have so far failed to deter many Indian investors.

Shaktikanta Das

Das is currently a member of the 15th finance commission that has been tasked with reviewing the government’s financial situation. He still maintains the belief that enforcing regulations would be a tough task:

“Let us accept that it would not be possible to regulate it effectively. Because they will do transactions from their houses. You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and this should not be allowed at all.”

Das’ opinion matters because he has held several key positions in the finance ministry, heading the departments of revenue and economic affairs. He has also been a board member of the Securities and Exchange Board of India and the RBI, both of which are involved in drafting cryptocurrency regulations.

The big issue with cryptocurrencies, according to Das, is that they have no asset base: “[Fiat] currencies have the guarantee of the RBI, on behalf of the sovereign. That is the underlying guarantee for that. Share of a company—you have an underlying asset of the company. In cryptocurrencies, what is the asset base? It is created out of vacuum, it is created out of thin air.”

Looking Elsewhere

Some Asian countries, in particular, China, share India’s apprehensions. Japan, in contrast, passed a law in March 2017 allowing digital currency payments and declaring them assets, and since then have been making attempts at regulation. South Korean officials have also promised not to clamp-down on crypto. 

Because of these attitudes, according to Anirudh Rastogi, managing partner at New Delhi-based law firm TRA, it may not be practical for India to write off cryptocurrencies completely:

“That would work very well if the global financial community was moving that way, but since it is not, and, if you want to be an outlier in that regard, it is going to have an adverse impact on your [India’s] financial system,” Rastogi said. “If two or three of the largest economies are giving it legitimacy, one needs to take a hard look at it before you take a drastic step.”

Moreover, measures to curb cryptocurrencies could instead encourage illegitimate transactions:

“You will just drive these transactions from otherwise compliant exchanges, which keep records, and basically drive them underground, making it very difficult to keep track of transactions,” Rastogi said. “It would be very difficult to enforce a ban, and that is one of the reasons why various jurisdictions have kept away…but have rather regulated cryptocurrencies,” he added.

The post Indian Finance Commission Member Shaktikanta Das: “It Is Impossible to Effectively Regulate Cryptocurrencies” appeared first on NewsBTC.

The main objective of the Swapy Network is to create a more efficient credit market based on the blockchain. The project proposes a solution to connect all the major participants in the financial industry to offer mutually cost-effective services, lower the barriers of entry into the sector, empower the underserved consumer and offer the merits of universal credit access.

Swapy Network seeks to solve a number of extant problems surrounding the financial market space. One major challenge is that there are numerous underserved populations across the globe, particularly in emerging economies who have limited or no access to credit facilities. Banks are hesitant to issue loans to this group in view of the high-risk potential. The few financiers that offer them credit do so at outrageous rates.

At the same time, there are significant disparities between interest rates in the developed world and developing nations. High-interest rate spreads in emerging economies make credit services costly and at times unattainable. Access to information is another challenge for players in the sector with both the quality and quantity of data accessible varying from one country to another. New entrants in the space have a difficult time accessing such information in spite of it being crucial to their success and this has proven to be debilitating.

The Swapy Network proposes to solve all of the above problems using a protocol that comprises of three main applications:

The Swapy Exchange

This application connects international investors and credit service providers around the world in order to create a more efficient money market model. Investors operating in countries where interest rates are low are thus able to work with credit companies in places where interest rates are high, ensuring higher returns for the former and lower capital costs for the latter.

Getting access to credit at lower rates, in turn, means that financiers can afford to transfer the benefits to their customers by lending at lower rates.

Swapy Financial ID

This is a digital identification framework that will hold international validity. This ID simplifies the application process for credit clients since they only have to go through Anti Money Laundering (AML) and Know Your Customer (KYC) processes only once for unlimited access to credit services globally.

Every creditor will have access to their own credit history and can thus access credit facilities with greater ease no matter their location. This will facilitate low-cost credit provisions because access to such pertinent information means lower risks for financiers.

Swapy Data Market

In the current model, institutions are collecting tons of individual data without consent and thus gaining an unfair competitive edge over new entrants. This information asymmetry favors large corporations which, in turn, charge high premiums for credit companies wishing to gain access to the data. These costs are passed on to the consumer and contribute to high-interest rates. The Swapy Data Market eliminates this imbalance and makes data available to all players without discrimination.

On the other hand, data owners are able to commercialize their information by charging an agreed upon the number of tokens for consultation. To ensure data veracity, the application will incorporate reliable data validators.

These three pillars of the Swapy Network create a circular ecosystem for new entrants and established ones alike. All players in the network get incentives for adding value to the concept and working towards its success.

The Inspiration behind the Project

The platform’s CEO, Edmilson Rodrigues from Brazil, left his job at Google in a bid to pursue an MBA in the United States. Unfortunately, due to the constraints surrounding credit access in Brazil, he was unable to achieve this. But instead, he got the opportunity to enroll into Draper University, a Silicon Valley initiative by Venture Capitalist Tim Draper and following this, he got an investment to make his dream of equitable credit access a reality.

Apart from having the legendary Tim Draper as an investor, the project also has the support of Don Tapscott, Lanzame Capital and SU Ventures among other notable names.

Token Sale Details

Swapy Network has scheduled a token sale to raise $30 million worth of Ether for financing its app and protocol development, a five-year project. The pre-sale will take place between 19^th March and 19^th April 2018 followed by a crowdsale from 26^th April to 26^th May 2018. The pre-sale and the crowdsale hard cap will each be $15 million USD.

More information on the project and its upcoming ICO is available on the Swapy Network official website.

The post Swapy Network – Breaking down the Barriers to Universal Credit Access appeared first on NewsBTC.

The Brookings Institute warns that the petro will undermine both international economic sanctions and truly decentralized cryptocurrencies.

There is a lot of excitement in the world of cryptocurrencies today. So many projects are available on the market right now, all of which generate a varying degree of attention. In the case of EOS, the opinions are somewhat divided. More specifically, some people – including John Oliver – are not too sure where the value of this project comes from exactly.

The Story of EOS so Far

Even though there is a lot of potential where EOS is concerned, most of the work is unfinished. As of right now, the project is still in the early stages of development. Despite that drawback, the project’s valuation has skyrocketed. At the time of writing, the EOS project is valued at over $4.4 billion. A steep amount for a project that has no working product at his point in time.

HBO’s John Oliver recently talked about this project during his Last Week Tonight show. The company has attracted his attention due to their skyrocketing valuation. The parent company has been referred to as a software company not selling any software. That alone should make more people cautious first and foremost, but so far, it has the opposite effect.

Additionally, the EOS token has been described as a digital token having no purpose. All of this should more than warrant a very low price for EOS in the current stage of development. Yet for some reason, its price is only rising even though the project developers still have a ton of work to do in the coming months and years.

What Comes Next for EOS?

The ambition associated with EOS should not be taken lightly. This team of developers wants to address a lot of current problems in the world of decentralized applications. Building a new powerful platform from scratch will not be easy whatsoever. So far, there is a lack of decentralized applications on the EOS protocol to revolutionize many industries. At the same time, building such a platform will not be done overnight by any means.

Justifying the project’s value can be done in many different ways.  Having powerful partners on board helps legitimize the project as a whole. The expectations for EOS are sky high, but delivering on that promise will be another thing altogether. With two initial versions of this platform released already, investors are in good spirits. 

It will be quite interesting to see how the EOS project unfolds. A lot more questions can be raised when looking closely at how things are evolving. That doesn’t mean this is not a legitimate venture, mind you. They raised $1.5bn during their ICO several months ago. That valuation has now tripled without much working code. Whether or not hat is the “new normal” we should all adhere to, is subject to interpretation.

The post John Oliver Criticizes EOS For Lack of Commercial Product & $1.5 Billion Fundraiser appeared first on NewsBTC.