Daily Archives: November 3, 2018

Binance Off To Flying Start In Uganda With 40,000 Users In First Week

Binance has stepped into Uganda with a flourish as 40,000 new users signed up to the exchange in the hope of bypassing the Ugandan Shilling (UGX).

Many citizens of African countries are unbanked, either by choice or due to complicated prohibitive rules which make it hard to open an account. Uganda is no different, with a recorded 3/4 of the population without any form of conventional banking.

This is Binance’s first fiat-crypto exchange with UGX, the primary fiat currency and comes less than a month after the company acquired an EUR bank account in Malta, with more exchanges to come, according to CEO Changpeng Zhao. Binance’s enigmatic boss clearly realises the potential of Africa as a new investment hub due to the unbanked nature of much of its population:

“Uganda is a really interesting situation, only 11% of the population has bank accounts. It’s both a challenge and an opportunity. So it may be easier to adopt cryptocurrency as a form of currency instead of trying to push for bank adoption”.

Africans have been clever in dealing with financial barriers, and using cryptocurrency is increasingly becoming a go-to way in order to sidestep banking restrictions or weak state currencies. Corruption is also another factor never far from the surface in some African economies often necessitating the need for a clever approach by locals in order to conduct their everyday business.

Recently, neigbouring Kenyan Distributed Ledgers and Artificial Intelligence task force chairman Bitange Ndemo said that that government should consider tokenizing the economy to deal with “increasing” rates of corruption and uncertainties-such is Africa’s increasing faith in crypto ahead of local fiat currencies.

Wei Zhou, Binance’s chief financial officer, suggested that one reason for the exchange’s surge of clientele in the first week is the fact that it is so easy for Uganda’s unbanked to access the system, commenting, “They [users] just have to have money within the mobile payment system. They don’t have to have bank accounts.”

The country’s president, Yoweri Museveni, said recently that he welcomed and embraced blockchain technology in Uganda since it provides full transparency, and added that he was aware how businesses were being negatively impacted by what he called “secrets and deceit.”

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Ethereum Gets A Thumbs Up From JP Morgan

The Australian Financial Review reports that JP Morgan has given Ethereum a solid thumbs up with its commitment to Quorum.

Described by JP Morgan as “an enterprise-focused version of Ethereum” Quorum continues to find favor with the bank, according to the head of blockchain initiatives. Umar Farooq has been praising its use for tokenizing gold bars in custody by other financial institutions, this despite frequent disparaging comments made by the bank’s CEO, Jamie Dimon, about cryptocurrency’s flagship digital currency, Bitcoin. Farooq commented recently:

“There are people outside our firm using Quorum to tokenize gold, for instance. They wrap a gold bar into a tamper-proof case electronically tagged, and they can track the gold bar from the mine to endpoint – with the use case being, if you know it’s a socially responsible mine, someone will be willing to pay a higher spread on that gold versus if you don’t know where it comes from. Diamonds is another example … We are the only financial player that owns the entire stack, from the application to the protocol. We are big believers in Ethereum.”

Dimon still maintains that the emphasis in the financial sector should remain on the blockchain, rather than Bitcoin which he maintains, he has unintentionally become the spokesperson against, arguing, “I didn’t want to be the spokesperson against Bitcoin. I just don’t give a ….., that’s the point…Blockchain is real, it’s a technology, but Bitcoin isn’t the same as a fiat currency.”

The New York global banking giant is flexing its blockchain muscle to speed up international payments with its Interbank Information Network (IIN) launched in 2017. The Quorum-based blockchain has attracted the Union Bank of the Philippines as its first user. Among other banks on the network will be Australia’s ANZ, one of the country’s big four, and Japan’s second-largest bank by assets, Sumitomo Mitsui Banking Corp.

When it comes to cryptocurrency, JP Morgan appears to vacillate between rejection, tolerance or possible adoption, depending on the spokesperson at any given time, many of whom have now moved on, some to launch their own startups, such as Amber Baldet, the original face of the Quorum project.

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UK Crypto to Flourish Despite Brexit Fears, Say Experts

Experts in the UK have indicated that Brexit augurs well for cryptocurrency regardless of concerns about the direction of Britain’s economy after March 2019.

UK Chancellor Philip Hammond’s August forecast that the UK could see an 87.7 percent hit to GDP and a £80 billion black hole in public finances in a no-deal scenario holds no concern for many cryptocurrency experts.

Mike Romanov, chief executive of Digital Securities Exchange (DSX) sees Brexit as a further way of the UK establishing its own rules for cryptocurrency trading which will push the sector forward, arguing that, “Britain is already looking at how it can maintain its dominance in financial services post Brexit, even as some major players abandon ship ahead of March next year.”

This is not only a positive outcome for conventional financial markets according to Romanov, but the UK taking back rulemaking could have a significant impact on the trading of digital currency. He suggests:

“As such, crypto could present a big opportunity. While the EU looks to apply regulation at an EU level, taking it out of the control of member states, Britain could be free to apply its own rules and shape itself to become a well-regulated and crypto friendly market that looks to nurture the future of this financial movement rather than eye it with an air of suspicion and cynicism.”

Cryptology’s chief commercial officer Herbert Sim also feels that bureaucracy will take a dent when Britain pulls out and that this has to be a good thing for crypto movement in the financial environment. He suggests that “…leaving the EU will give the UK decision-making capabilities on areas that the EU’s bureaucratic processes can be desperately slow to decide on.” The opening of foreign crypto markets outside of Europe will positively impact the status quo, Sim suggests. Another CEO, Iqbal Gandham from eToro, claims that any volatility from Brexit will be short-lived:

“We are already seeing crypto assets used as an alternative in less stable economies, and Brexit could spark a new wave of investment from people looking to diversify their portfolios and hedge against geopolitical risk.”

However, all these positivity comes with a warning according to Romanov who comments that Britain needs to maintain its competitive edge, “What can’t happen is for Britain to become scared of its own financial shadow and water down the investment it’s made into new technologies, all in a bid to placate the traditional financial services world.”

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SEC Shuts Down More Than 12 ICOs in One Year

The US Securities and Exchange Commission (SEC) has continued its crackdown on Initial Coin Offerings (ICOs) and claimed to have shut down more than a dozen of them in the last fiscal year alone. The last fiscal year ended on September 30 of this year and it appears that the watchdog is not ready to dial things down when it comes to Initial Coin Offerings in the country.

According to an official report, three of the closed ICOs raised more than $68 million from investors before they were finally shut down by the authorities. Overall, the SEC got more than $3.945 billion in fines and penalties during the same time period. While the SEC is not just cracking down on ICOs, the tone and aggressive attitude towards the crypto startups was much more pronounced than other companies.

According to the report:

“Given the explosion of ICOs over the last year, we have tried to pursue cases that deliver broad messages and have a market impact beyond their own four corners,”

The report also noted that the new Division of Enforcement and its Cyber Unit formed at the end of last year has helped it with its pursuit of “cyber-related misconduct” which includes cryptocurrencies for sure.

The report also mentions ICOs and that many of them are under federal investigation and cases are still pending against them. SEC is also going against unauthorized digital asset brokers in the country, thus keeping a firm oversight over the entire cryptocurrency scene.

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European Parliamentarian Says DLT ”Provides More Security”

Member of the European Parliament (MEP) and Maltese government official Roberta Metsola, has stated that decentralization via distributed ledger technology (DLT) is a more secure option than centralized models.

Speaking at the Malta Blockchain Summit on 2 November 2018, Metsola stated that European officials should make it their duty to inform citizens of this fact, saying that blockchain’s primary focus regards ”increasing trust” between parties, as reported by Cointelegraph. According to Metsola, its use can bring ”peace of mind” because of the trusting decentralized quality.

Metsola also took the opportunity to share her positive outlook on the European Parliament’s handling of the cryptocurrency and blockchain industries, saying that these subjects remain firmly on the agenda, with MEPs currently being encouraged to turn adoption from a ”vision to reality.”

However, she included that the parliament had to be sure to encourage the ”right type of regulation,” which for her means to avoid stifling innovation.

In Malta

Malta’s newest blockchain and cryptocurrency legislation passed in July was brought up by Metsola as a ”good step forward” and an example of the type of regulation that can be implemented in the European Parliment’s jurisdiction. Europe’s open, non-restrictive regulatory system was said to allow other countries to follow in Malta’s wake.

Despite this praise, she said it was still important for the government to remain alert for any changes or issues within the industry that requires its support.

Malta has managed to firmly establish itself as a country at the forefront of progressive blockchain regulations. As reported by Bitcoin News, Prime Minister of Malta Joseph Muscat, gave a speech to United Nation’s General Assembly (UNGA) in September where he declared cryptocurrencies to be the ”inevitable future of money.”

He also shared the promise he sees in blockchain technology as an answer to pressing issues such as healthcare records and verifying humanitarian aid.

 

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Paxful P2P Claims Africa Has the Largest Bitcoin Trade Volume

Cryptocurrency is finding its feet in Africa, as US-based P2P crypto marketplace Paxful is finding out this year with transaction numbers rocketing.

Paxful Inc. operates a peer-to-peer payment logistics platform which focuses on buying and selling of bitcoins. The company has just returned with impressive numbers after its leadership team visited Africa to assess its successes there.

The trip to South Africa, Nigeria and Ghana revealed that Africans are turning to Bitcoin in ever increasing numbers with Paxful’s transactions alone standing at R948 million ($66 million) per month. Over the past year, Paxful transactions from SA increased by 25%, by 60% in Nigeria and by up to 100% in other parts of the continent. For Africa as a whole, Paxful has seen a 225% increase in users in the last 12 months.

The South African economy is struggling but Bitcoin continues to gain popularity with investors, writes bitcoinist.com. In April of this year, the South African Central Reserve Bank (SARB) announced moves towards overseeing cryptocurrency and fintech developments in the country, suggesting rather than taking prohibitive regulatory measures, it would introduce an investigative unit which would promote growth and innovation. The South African Revenue Service also announced a new framework for cryptocurrency taxes.

As a result, cryptocurrency adoption has started growing in the region. AsiaCrypto puts Bitcoin’s continued popularity in South Africa down to the fact that some of the country’s larger asset holders are moving into crypto. “Bitcoin” is now reported to be the trending term on SA Google search.

In South Africa, Paxful is not alone, with Luno recently announcing that it now has two million users spanning 40 countries. Another South African-based exchange, Coindirect, now trades over 40 altcoins. Paxful COO Artur Schaback comments:

“As a company, we’ve learned a lot from African consumers. For instance, we’ve improved our mobile capabilities to cater to the widespread use of smartphones on the continent. Our experience in Africa has strengthened our capability to serve consumers regardless of geographical location or origin.”

In parts of Africa, cryptocurrencies such as Bitcoin have very little speculative value; with local currencies often struggling, cryptocurrencies are often simply used as payment for goods or transferring funds as a more viable and reliable alternative to local fiat.

Recently, countries such as Zimbabwe, South Sudan, and oil-rich Nigeria have all suffered from inflation, while others continue to go through it.  In these situations, it is hardly surprising that populations look to a more stable form of monetary solution in their daily lives. Paxful, like other exchanges operating for those on the African continent,  is beginning to see this groundswell feed through as Africans turn more readily to P2P cryptocurrency trading as a financial solution to everyday problems.

Ray Youssef, co-founder, and CEO of Paxful suggests Africans have been clever in dealing with financial barriers in some of these countries:

“The people of Africa were educating us. It really wasn’t just Bitcoin and Paxful–it was peer-to-peer finance. These folks were finding ways around all their barriers – whether foreign or domestic – using peer-to-peer finance… The same thing that Uber did for transportation and Airbnb did for hospitality, peer-to-peer financial marketplaces are doing for finance.”

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Azerbaijan Finds Blockchain Solutions for Legal, Housing, Utility Sectors

Azerbaijan has revealed its plans to use blockchain technology to improve the efficiency of the country’s legal system a well as in the housing and utilities sector. In particular, smart contracts will be rolled out.

According to local reports, the initiative of the Azerbaijani justice ministry was outlined in a meeting earlier this week that included a discussion of its implementation in the country.

It was stated that smart contracts will, with time, come to replace the standard contracts between customer and utility provider.

Chairman of the Azerbaijan Internet Forum Osman Gunduz spoke to the regional news outlet Trend News Agency, saying that the switch ”will ensure transparency and will allow to suppress the cases of falsification in this area”. Gunduz added that the citizens will benefit from being able to control the processes themselves for the first time.

Right now, the Ministry of Justice provides over 30 electronic services and around 15 forms of online information systems and registries, which Gunduz believes are key areas for blockchain solutions. In practice, he says that blockchain technology can be successfully implemented wherever it relates to registries.

Another area that he thinks that the technology can be particularly important is in that of ”electronic courts”, where he says there has been a lack of experimentation, operating in just ”a few judicial instances yet”.

Last month, Trend News Agency reported that IBM had plans to collaborate with Azerbaijan’s central bank in an effort to implement blockchain technology as part of a five-year economic plan for ”digital transformation”. The initiative has ambitions to modernize the country’s banking sector, in turn, benefiting the aggregate economy.

 

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BlackRock Waiting for Market ”Legitimacy” to Launch Crypto ETF

The largest asset manager in the world, BlackRock, has said that any plans to launch a cryptocurrency exchange traded fund (ETF) will be put on hold until the market matures.

BlackRock CEO Larry Fink featured on CNBC Thursday, where he shared, “I wouldn’t say never, when it’s legitimate, yes.”

While a number of Bitcoin ETFs have been proposed to the Securities and Exchange Commission for its required approval, the agency has identified a number of issues that have prevented any being launched as of yet. Most notably included is a need to protect investors from activities such as insider trading that it believes the market is particularly susceptible to due to a lack of oversight.

It is this level of independence that the market operates with that Fink sees as a factor stifling its growth into mainstream finance.

“It will ultimately have to be backed by a government. I don’t sense that any government will allow that unless they have a sense of where that money’s going for tax evasion and all of these other issues,” he said, although due to the ideology behind Bitcoin‘s creation, it is very unlikely to become backed by the state.

While Fink was skeptical of the cryptocurrency’s apparent ease of use in illicit activities, he does see a future where a digital currency could be traded as a store of value, something that some investors say is Bitcoin’s primary use case. For now, however, he says that there is no need that he can see for a store of wealth unless it involves ”things you should not be doing”.

Blockchain is something that the CEO does have faith in though, describing BlackRock as a ”huge believer in blockchain”. He cites the most likely area for mass adoption as that which involves laborious paperwork such as mortgage applications and ownership.

 

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