Category Financial

In the midst of increased interest in cryptocurrencies by policymakers and central banks due to China's intentions to issue a digital yuan, a Bank of Japan official said that the bank's move to launch a cryptocurrency would depend on public support, reported the Bloomberg.

"At the end of the day, there is no way to proceed without getting enough knowledge from the Japanese public," said Kazushige Kamiyama, who heads BOJ's payment systems department.

In the event that the central bank later makes a digital unit, Kamiyama indicated that it would seek to strengthen the transaction ecosystem and would exist alongside cash and other types of digital payments instead of a monetary policy mechanism.

"We have clearly emphasized that banknotes and digital currency will coexist," said Kamiyama, noting that the cryptocurrency will not be "useful for deepening negative rates" since the banknotes will exist.

COVID-19, for its part, continued to accelerate the use of non-cash payments in the country and elsewhere, illustrating the growing desire for different and easier ways to transact.

Although the Bank of Japan does not have an immediate timeline for issuing cryptocurrencies, the central bank's deputy governor indicated in January that he should analyze the potential and be ready.

If the technology gains increased public interest, said Masayoshi Amamiya at the time, there may potentially be a need to issue digital coins from the central bank (CBDC).

There are still a number of details that have to be analyzed before a CBDC can be issued, with issues that remain such as its impact on monetary policy and ensuring the application of specific and strong security rules.

However, he stressed that he considered it "very important" that the BOJ continues to analyze the viability of the circulation of the CBDC.

In other CBDC news, the Federal Reserve is working together with seven other central banks and the Bank for International Settlements (BIS) to set up a framework that would facilitate the path for issuing digital currency.

source: pymnts.com

The investment bank makes a bullish comment for bitcoin as an "alternative currency" that not only serves as a storehouse of wealth but also as a means of payment.

The tide is changing.

This week PayPal announced support for cryptocurrencies, and now JP Morgan is changing the tune, as it says, Bitcoin is competing with gold as an "alternative" currency.

The physical gold market, favored by older generations, is worth $ 2.6 billion, including assets held within gold ETFs.

Bitcoin, on the other hand, has a market cap of $ 240 billion and is mostly favored by millennial investors. In 2020, to date, Bitcoin has increased by more than 80% compared to almost 25% of gold.

To recover in terms of market value, the leading digital currency would have to rise more than 10x above current levels. JPMorgan said in a note on Friday,

"Even a modest agglomeration of gold as an 'alternative' currency in the long run would mean doubling or tripling the price of bitcoin"

Over time, the investment bank said that crypto could be owned for reasons other than just being a wealth store like gold is.

"Cryptocurrencies derive from value not only because they serve as stores of wealth, but also because of their usefulness as a means of payment. The more economic agents accept cryptocurrencies as a means of payment in the future, the greater their usefulness and value"

PayPal also mentioned that the payment company's endorsement is "another big step towards corporate support for bitcoin". This, they said, would further reinforce the use of BTC millennials as an alternative currency.

Greater interest in institutional investors

Overall, the long-term potential for bitcoin is considerable, as it competes more "intensely" with gold, "given that millennials would over time become a more important component of the investor universe," says JPMorgan.

Millennials and corporate support for digital currency have also sparked greater interest from institutional investors, the report says.

This is evidenced by the peak of activity in both bitcoin futures and options in CME. Prior to Paypal's announcement this week, open interest on CME's BITCOIN futures measured a record of 10.5K contracts per day in the third quarter, an increase of 32% in terms of the second quarter and an increase of 127% compared to 3rd quarter of 2019.

In addition, the institutional flow registered strong growth, with 692 new accounts added, and the number of large holders of OI also registered an average of 79 in the 3rd quarter, an increase of 64% in relation to the 3rd quarter of 2019.

"Holy Cow. Most of the bullish bitcoin comments I read from JP Morgan," noted Dan Tapiero, co-founder of 10T Holdings. "A piece of widespread investigation reaches all customers of the bank. Paypal has announced" coverage "for other traditional players to get involved," he added.

source: bitcoinexchangeguide.com

Totally 86% of traditional companies are implementing or at least considering blockchain-based decentralized finance technology, says Boston Consulting Group.

More than four out of five traditional European financial institutions now see decentralised finance, or DeFi, as a technology worth implementing or at least considering.

That's according to "The Sudden Rise of DeFi," a new study of 411 insurers, banks and trading companies released by Crypto.com and the BOSTON Consulting Group BCG Platinion with an IT focus on October 22.

Specifically, 86% are implementing or evaluating services based on a decentralized structure.

Noting that the blocked value in DeFi grew an impressive 1,500%, to $8 billion, the report concluded that the "ability to borrow, make loans, deposit funds into a savings account or trade complex financial products, all without asking anyone because permission is gaining strength."

Larger companies are shifting more aggressively to DeFi, with 71% of those with a balance sheet above $13.1bn (£10bn) implementing or evaluating the technology, compared with 51% of those below $131m (£100m).

"Research shows that the adoption of DeFi is not just limited to the blockchain industry," crypto said. with co-founder and CEO Kris Marszalek. "Traditional financial institutions of all sizes are seeing DeFi not as a competitive threat, but as a valuable tool for delivering more decentralized and efficient financial services."

Of the companies surveyed, 38% - and 61% of the largest companies - are using DeFi to "facilitate faster and safer payment processing services," the study concluded.

Two-thirds of respondents - 67% - believe DeFi will open up new revenue streams, while 70% believe it can make financial transactions faster and cheaper.

"As markets evolve toward decentralization, there will be a growing demand for approaches such as DeFi, which can provide a more efficient and open form of banking, trade and investment," concluded Kaj Burchardi, managing director of BCG Platinion.

"It is encouraging to find that financial institutions are already seriously and strategically collaborating with the cryptographic community to begin building a new generation of governance and technologically resilient solutions that will make financial services more accessible."

Work to be done

That said, the report found serious concerns about the lack of regulation, with 61% saying it made them hesitate - a concern that worsened for companies with higher turnover or more assets under management.

Almost the same number - 60% - said the lack of recovery mechanisms is worrisome.

Fraud security concerns are another challenge, with 70% saying it prevents DeFi adoption across the enterprise.

Still, the risk of vulnerabilities in smart contracts that put assets at risk is the biggest concern of DeFi research participants.

"There's still a lot of progress to be made to bring DeFi into the mainstream, especially in security and compliance," Burchardi said.

This is something that European regulators recognise. The European Commission last month unveiled "ambitious" proposals to regulate cryptocurrency assets and service providers. Unfortunately, it also predicted that it would take four years for these regulations to enter into force.

source: modernconsensus.com

The last three months in Bitcoin have been marked by large corporate entities that have transitioned significant parts of their treasury holdings to bitcoins. In August, software intelligence company MicroStrategy announced that it has bought 0.1 percent of the total supply of BTC (its CEO Michael Saylor has already reached the ceiling and become something of a celebrity in space).

The large payments company Square, which for some time has offered BTC exposure to users of its mobile payments platform, allocated $50 million of its assets to bitcoin in early October. And just yesterday, the British fintech company Mode allocated 10% of its cash reserves to buy BTC as a treasury asset.

To compile this trend into a single, easy-to-digest database, Rodolfo Novak of Coinkite, also known as NVK, has launched bitcointreasuries.org. It lists the companies that have made the transition to keep bitcoin as a treasury asset, along with its market limits, the base price of their investment relative to today's value, the amount of BTC they hold and, critically, the percentage of the total supply of BTC that each bought. The allocations listed a total 3.74% of all bitcoin that will exist.

"I always assumed there was a place where you could see, not a complete list, but a list of large bitcoin holders who are not private entities," Novak told Bitcoin Magazine. "Especially with publicly traded companies because they have all their public books anyway and it's all audited. But I couldn't find anything and I love buying domains, so I started bitcointreasures.org [ ] in the hope of creating more FOMO for other companies"

Why now?

The list consists mainly of blockchain-focused companies that have divested into BTC some time ago as part of their larger business missions. The Grayscale Trust, for example, holds the highest proportion of bitcoins on the list by far 2.17% of the total supply.

But many of the purchases or filings listed on the site occurred this year. Novak explained that while it may seem that many companies are jumping into Plan B at once, it is likely that even the most recent purchases have been planned for a long time, demonstrating HODLer's understanding of the asset.

"Corporate governance, especially for publicly traded companies, moves at a slug pace," he said. "So there must be some mechanisms in place - a kind of model of how to do this. And it took years to get done and, you know, bitcoin goes up, bitcoin goes down. And if you haven't been in this space for a decade, it's hard for you to understand that after bitcoin decreases, it increases again. The number goes up"

But the reasons for switching to a heavy treasure trove of bitcoins should be clear, especially in recent months.

"You have this value reserve, everything meets the pleasure of value booking," Novak said. "And, you know, you hold it because you still want to be above water 30 years from now…. It's like, 'Hey, I got money in the bank, it's going to suck, I need to find a solution.' And, you know, gold pet stones are not a solution"

What does this mean for Bitcoin?

As there is a finite supply of bitcoin (there will only be just a little less than 21 million BTC thrown into circulation), when any entity grabs a significant amount, it affects everyone who wishes to get their hands on some as well. And, as an important value proposition for bitcoin is this scarcity, these corporate purchases have implications for the price of bitcoin relative to fiat as well.

As a Bitcoiner who is ahead of corporate interests, Novak is optimistic about the trend.

"Everything is good for Bitcoin, right?" he asked. "The scarcity of bitcoins comes from the people who buy, right, and you have a stock limit for that. So the more these giants buy, the more the price goes up for everyone"

He also pointed out that the more different types of entities start retaining bitcoin, the more the network as a whole will benefit.

"You want your enemies to have bitcoin, you want your competitors to have bitcoin," he said. "Because the more types of people with different sets of preferences, different sets of incentives have, the more secure the network will be... If Kim Jong-un has bitcoin and the US has bitcoin and China has bitcoin, it's in everyone's interest not to make any changes to Bitcoin, right? Because if one wants a change that is beneficial to them, others will want that change as well. So it's a nice set of incentives"

Some retail investors may see this trend as a warning to stack satellites while they are still available. But Novak points out that while the list of bitcointreasuries.org is growing, there is still a significant opportunity to get ahead of most corporations.

"The little boy still has a chance to win a Berkshire Hathaway. You can even DCA for $10 a week or anything, and you can buy before them. So I don't think it's an opportunity that people should waste. It's a crime not to have exposure to bitcoin right now"

Where is this trend going?

When asked where the trend is going in the corporate allocation of BTC, Novak said he thinks bitcointreasuries.org will no longer exist in 10 years because "every publicly traded company that has treasury management in assets that are not just the dollar, they will have some exposure to bitcoin."

This seemed to be a matter of inevitable "hyperbitcoinization", but in the short term, it may help that some groups already on this list have published their disinvestment methodology in BTC. For example, Square has released a white paper detailing its investment. Novak could see this being used by other groups that are interested in following him toward Plan B.

"They have created a model that other publicly traded companies in the U.S. can simply follow and comply with regulations to do so. Now, just go to a [corporate] board and show that role. You go to your legal, show me that paper. Conformity, show me that paper, that's it. Just make the transfer and buy bitcoin"

A high run in the near future will likely also motivate more companies to follow Square's example. But the ultimate motivator may just be bitcoin's final game. Companies that have already arrived in bitcointreasury.org have adopted an amazing tool to choose to leave the legacy financial system if and when that is necessary. Others will want to join them.

"Now they have an instrument they can just send elsewhere. Let's say America decides to go to shit, right? They could just send this BTC, they don't need permission"

source: nasdaq.com

• The balance of Bitcoins on some of the major exchanges is falling rapidly, according to recent data.
• There are many reasons why this may be the case, including the newly discovered appreciation of BTC.
• With only a few exchanges seeing these reductions, many believe they are losing customer confidence.

The supply of Bitcoin (BTC) held by major exchanges has fallen to levels that have not been seen in the past two years. The last time BTC's balance on major trading platforms was so low was in 2018, according to data collected on October 20.

People are realizing the value of Bitcoin

The crypto industry grew rapidly throughout 2020 and for a number of reasons. The existing crypto community has been buying with the intention of HODLing since BTC fell for the third time, expecting prices to skyrocket.

Then there was the COVID-19 pandemic, which caused the global economic collapse due to pure fear of what it can do to various sectors. In the end, the world began to realize something that the crypto industry has known for years – BTC is the only asset that offers a solid monetary policy.

At least that's what Nexo co-founder Antoni Trenchev recently noted. He said BTC is the best performing asset of the decade and that the world has begun to realize this.

He added that the community is resorting to self-care solutions, which include platforms such as Nexo itself. These platforms allow tax-saving loans against assets that users already own.

There is no need to sell to win, and all the popularity has generated more discussions about crypto than ever before.

BitMEX and Bitfinex may be losing users' trust

Celsius co-founder Alex Mashinsky expects this state of affairs to continue unless the exchanges change the terms of the deals they are offering in order to lure users back to their platforms.

Not all exchanges are affected equally, of course. Platforms like Binance and Coinbase, which offer good conditions to their users, have kept their funds. Meanwhile, companies like Bitfinex and BitMEX have seen severe reductions in their assets.

The rise of the DeFi sector has undoubtedly contributed as well as the growing interest of institutional investors. They used companies such as grayscale and Microstrategy to accumulate large amounts of BTC throughout the year. Anyway, some exchanges seem to be losing the trust of their users, though not all, as mentioned.

source: digitalmarketnews.com

Bitcoin Group SE concludes merger of Bitcoin Deutschland AG with Futurum bank AG in Germany's first crypto bank.

- Merger of Bitcoin Deutschland AG with Futurum bank AG registered in the commercial register

- Combined entity to operate under the name of Futurum bank AG

- Encryption and custody under the aegis of the Futurum bank AG from a single source

- Effects of high synergy at the organizational level

- New growth boost of institutional clients

Herford, October 22, 2020 - Bitcoin Group SE (ISIN DE000A1TNV91 ) has closed the merger of Bitcoin Deutschland AG with Futurum bank AG. Germany's first crypto bank is the result of the unification of the bitcoin.de and all investment banking services of Futurum bank AG. After successful registration in the commercial register on October 13, 2020, the combined entity will operate under the name Futurum bank AG. The integration measure is thus also concluded at company law level.

Upon completion of the merger, Futurum bank AG now groups all licensed regulatory assets held in the Group under an entity that has already been licensed under regulatory law. This results in high synergy effects within Bitcoin Group SE, reducing organizational and regulatory complexity. In addition, this measure strengthens Bitcoin Group SE's offering as a cryptocurrency trading platform and depositary. Futurum Bank AG can offer customers an even better service from a single source.

This marks another significant step in diversifying the business model. BaFin has established a unified legal framework for banks to offer and store cryptocurrencies. Bitcoin Group SE also makes use of this possibility and extends the provision of crypto custody services to the entire Group of companies. In the future, Europe's largest crypto trading platform will also be available to institutional clients through Futurum bank AG. The new customer base opens up new prospects for added value growth for Bitcoin Group SE.

"Market participants, both private and institutional, are looking for lucrative investment opportunities outside the Euro and US Dollar & Co. Cryptocurrencies are highly appreciated for their high returns and security features. Our reliable and attractive portfolio of services, which is already used by more than in the future, 884,000 private clients will also be open to institutional investors through the newly formed Futurum bank AG. We expect this to result in significant growth boosts for Bitcoin Group SE," said Marco Bodewein, Ceo of Bitcoin Group SE.

About Bitcoin Group SE: The
Bitcoin Group SE is a holding company focused on innovative and disruptive business models and technologies in the areas of cryptocurrency and Blockchain. Bitcoin Group SE holds 100% of the shares of Futurum Bank AG, which operates a trading market for the digital currencies Bitcoin, Bitcoin Cash, Bitcoin Gold and Ethereum under Bitcoin.de, as well as classic investment services and 50% of the shares of Sineus Financial Services GmbH, a financial services provider overseen by BaFin.

Bitcoin Group SE is listed on the Düsseldorf Stock Exchange Primary Market and on all other German stock exchanges (symbol: ADE, ISIN: DE000A1TNV91, GSIN: A1TNV9).

source: marketscreener.com

The Commodity Futures Trading Commission (CFTC) has issued a warning to futures commission (FCM) traders, providing clarity on how to take care of users' digital currencies in segregated accounts.

• According to a press release on Wednesday from the CFTC's Swap And Intermediate Supervision Trading Division, the consultancy informs FCMs on how to maintain and report certain digital assets held by clients in connection with physically delivered futures contracts or swaps.

• A segregated account means that the client's funds are strictly separate from the company's money.

• The CFTC noted that keeping client assets as segregated funds can allow greater risks to arise for other clients under the same banner.

• Financial watchdog consulting also provides guidance on the best practices FCMs should follow when designing and maintaining risk management programs when dealing with digital assets such as client funds.

• The consultancy does not refer to the custody of digital assets of foreign FCMs of client assets in relation to futures or futures options trading.

• CFTC Division Director Joshua B. Sterling said in a statement that the commission is "committed to promoting responsible fintech innovation" as it works to create a "holistic framework for digital asset derivatives."

source: nasdaq.com

• The bank's earnings report shows that deposits increased 8% in the third quarter
• The subscription bank continues to win crypto customers in 2020

Signature Bank, a challenging bank based in New York, achieved a 40% increase in deposits, 8% of which were obtained in the last quarter. As previously reported, crypto bank's blockchain push, introducing the first Stablecoin (fiat-indexed) in 2019, prompted JP Morgan Chase and Goldman Sachs to revise their own digital proposals.

Signature CEO and founder Joseph DePaolo has publicly praised the future of cryptocurrency, digital assets and blockchain. Speaking in 2018, he announced: 'If you are not involved in blockchain, in five years you will no longer be like a bank', shortly after the launch of Signet, crypto bank's DLT-led payment platform. Signet allows real-time settlement and real-time transactions between crypto bank clients.

Signature Bank is expected to launch an earnings call to announce the growth of unpaid deposits. This should be another indicator of acceptance of cryptographic clients to the bank.

Why deposits to an encryption bank?

The subscription has long maintained an operational focus on deposits, with DePaolo describing banks as deposit generators rather than loans. The idea is that the cost is recovered with the increase of the customer base and the offer of other banking services.

The focus has been successful so far. In the second quarter, $1 billion of the $8 billion in deposit growth was generated by the digital asset steam. As a bank clearly open to crypto companies, the signature's deposit growth indicates that crypto companies are taking on an increasing number of their low-cost deposits.

Signature Bank started as a start-up in 2000 and now constitutes $53 billion in just 20 years. It remains small compared to other major banks in New York but continues to weigh above its weight.

source: cryptopolitan.com

Project Sand is a digital simulacrum of the Bahamas Dollar.

In short,

• Project Sand, the digital currency of the Central Bank of the Bahamas, was launched today.
• It is used for domestic transactions.
• It uses distributed ledger technology but is not similar to Bitcoin.
• The Central Bank of the Bahamas today launched its own blockchain-based central bank (CBDC) digital currency, making it one of the first countries in the world to do so.

Called "Sand Dollars", tokens are cryptographic representations of the Bahamian dollar, coined and regulated by the country's central bank, which are integrated into the Caribbean island's payment networks.

Today marks the "gradual release" of the sand dollar, although a representative of the country's central bank told Decrypt that its 385,000 citizens can open Project Sand accounts today and process transactions.

"They can sign up today. And once they have the Sand Dollar wallet in hand, they can start trading - both for the general public and for traders," they said. Prior to today's release, there was a small-scale test that began in December 2019.

The central bank has authorized six financial institutions for the Sand Project: Omni Financial, Kanoo, SunCash, Cash N Go, Mobile Assist and Money Maxx. All but one aired today, the rep said. He added that the central bank will continue to integrate and authorize financial institutions, but that "the [institutions] are really leading this from now on."

The Central Bank of the Bahamas designed the CBDC to supplement cash and improve the country's existing payment system. In a FAQ page for the project, Project Sand states that the country's payment systems would charge users insignificant transaction fees and that the network is protected by high-level encryption protocols and "enhanced KYC/AML standards."

Unlike Bitcoin, Sand Dollar is controlled and coined by the central bank and can only be used for domestic payments. Still, according to the project's white paper, Sand Dollar is based on distributed ledger technology - in this case, a blockchain.

The Bahamas is one of the first countries to introduce a government-backed digital currency. Venezuela has Petro - encryption supposedly backed by barrels of oil; China's digital yuan is currently being tested in Shenzhen; Cambodia's blockchain-CBDC is in testing, but it is delayed, and the Government of the Marshall Islands is considering implementing a cryptocurrency called SOV.

According to a January report by the Bank for International Settlements, more than 80% of the world's central banks are researching CBDCs.

source: decrypt.co

While there is nothing official yet, a US digital dollar has become a legitimate discussion in cryptocurrency, to supplement the money.

In a historic move, Federal Reserve Chairman Jerome Powell said on Monday that the Fed is open to collaboration with private companies in creating a U.S. digital dollar. Could this be an official cryptocurrency?

Not yet. While Powell was sure the United States government was not committed to launching a cryptocurrency, he took note of projects such as Facebook's Libra, which prompted banks to take a closer look at the digital currency space. The President of the Federal Reserve also pointed out that there are issues and issues related to monetary policy, including monetary policy limitations. He also mentioned that cybernetics and illegal activities should be a concern.

Powell said at an International Monetary Fund panel:

"We will have many conversations with industry and the involvement of the parties investigated, and this will help us in our work with international currencies and payments. In fact, I think this is one of the issues that is more important for the United States to get right than to be the first"

Real-time payments have been a problem for the Fed, as the U.S. is behind other countries in space. Mexico launched Cobro Digital, which allows users and merchants to make online transactions at digital weights last year, and China began testing a digital renminbi. The Bahamas is the last country to enter the digital fray, announcing on Tuesday that it would launch a national digital currency later this month.

While the Fed is not committing to a digital dollar at the moment, they are in full swing to bolster payments in real-time. The Fed expects to maintain its FedNow system to allow real-time payments 24 hours a day, no later than 2024. So far, the project still seems to be working on time, according to those who are involved.

Despite the Fed's neutral response, a U.S. digital dollar seems almost inevitable. Last January, a survey of 60 central banks conducted by the Bank of International Settlements found that 80% of central banks work in their own digital currencies. That said, only 10% of the banks surveyed believe they disclose a digital currency in the short term, and 20% say they plan to launch something in the medium term.

When an official US cryptocurrency will hit the market, no one knows, but don't play for those notes yet. As Powell emphasized in his statements, any digital dollar would serve as a complement to physical money, not a replacement.

Powell also said:

"Unlike some jurisdictions, here in the United States continues to see strong demand for money. We think it's important that any potential CBDC serve as a complement, not a substitute for, money and the private sector's current digital forms of the dollar, such as commercial bank money"

source: theamericangenius.com