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Ripple’s Brad Garlinghouse Slates JPMorgan’s JPM Coin as Lacking Innovation

Wall Street banking giant JPMorgan’s announcement of its new stable coin JPM Coin, has Ripple’s boss Brad Garlinghouse criticizing its “closed network” lack of innovation.

JPMorgan says it sees potential in using digital coins to reduce risk and enable instant transfers, despite JPMorgan’s chief executive Jamie Dimon criticizing Bitcoin since it emerged as the industry’s flagship cryptocurrency.

The bank says it has always “believed in the potential of blockchain technology”. “We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” says Umar Farooq, JPMorgan’s head of Digital Treasury Services and Blockchain. The new JPM coin will be transferable between client accounts at the bank, who will then be able to redeem them for US dollars pegged at parity with the coin.

With the arrival of JPM, the volatility of Ripple’s XRP is brought into question and certainly draws obvious comparisons, to which Garlinghouse has reacted by saying there is nothing innovative about JPMorgan’s final arrival into the cryptocurrency space, arguing:

“As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO.”

His comments very much echo the sentiments illustrated in an article he wrote two years ago called “The Case Against BankCoin,” in which he argued that banks should be using XRP as the obvious independent digital asset, claiming they offered “universality” which bank coins did not:

“It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.”

Clearly, Ripple’s executives would argue that users of XRP also has the added option to speculate, holding on to the currency in the hope of trading later at a higher value; compared to bank coins which will only have a fixed settlement value based on parity with the US dollar.

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JPMorgan Introduces Its Own Digital Coin With Institutions in Mind

JPMorgan Introduces Its Own Digital Coin with Institutions in Mind

Major US-based multinational investment bank JPMorgan announced yesterday that it has launched a digital coin that will be backed by the US dollar.

A major breakthrough for cryptocurrencies which had for a long time been blighted in some circles as being untrustworthy, or so would some think. As a matter of fact, JPMorgan was among those in 2017 who ridiculed cryptocurrency and specifically called Bitcoin a fraud. Although its perspective on the subject of blockchain industry as well as properly controlled and regulated cryptocurrencies was that it held promise. Now, it stands as the first major US bank creating a digital coin and one among others in the traditional banking industry to create a real-world application of blockchain technology.

Consequently, this development has aroused some controversial sentiments within the crypto community. According to MarketWatch, Jerry Brito – executive director at Coin Center told the news outlet that the JPM coin isn’t a cryptocurrency but an in-house-built payment system. The bank did clarify on the differences between its digital coin and cryptocurrencies, however, it is a popular sentiment that any product built on the blockchain is assumed to come with the tag ‘cryptocurrency’.

As explained on the bank’s website, it appears that the JPM coin isn’t a legal tender, but a digital coin backed by the US dollar – not a stablecoin either – stored in designated accounts of JPMorgan Chase. The bank said that when one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount of US dollars, reducing the typical settlement time.

The JPM coin will only be used between its institutional clients as the core purpose of the coin is to save time for inter-bank/institution settlements, leveraging the robustness of the blockchain as opposed to legacy systems of money transfers. Accordingly, the coin will not be available to individuals, however, the bank says that the rippling effect in the efficiency of money transfer will confer certain benefits to individuals.

The bank may not stop at the digital coin alone, it said in its news release that with respect to its other businesses like custody or clearing and settlement, “it’s still too early to assess the ultimate impact of blockchain,” and it intends to further explore areas of applicability as it works with clients around the world. Perhaps, it may join the list of financial institutions proposing to offer custody solutions in an attempt to cater to institutional investors willing to join the crypto derivative market once the system is well regulated.

Blockchain-related trends in the banking industry have been growing of late with expanding use cases specific to interfacing with the technology to facilitate money transfers between financial institutions. As reported in December last year, Signature Bank’s Signet may have been the first regulator-approved blockchain-based payment system developed by a bank. It was designed to eliminate third parties and process payments faster between the bank’s clients.

Saudi Arabia and the UAE have been discussing plans on developing a blockchain-based cross-border payment system for inter-bank relations.

Moreover, the subject of a state-backed central bank digital currency (CBDC) has been frequently discussed in many banking circles. However, the views on such development have been rather polarized. Perhaps, this step made by JPMorgan will further facilitate the adoption of different blockchain use cases for other banks as they race for inclusion into the emerging market.

 

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Bank Outages Show System Vulnerabilities Bitcoin Users Avoid

Bank Outages Show System Vulnerabilities Bitcoin Users Avoid

As the traditional banking system continues to incorporate electronic and digital payments, the latest Wells Fargo outage illustrates that all is not well in the light of similar events this year with other major card service suppliers.

With the US’s fourth-largest bank by assets falling foul of an ATM glitch in its system last week, denying customers access to their funds, Bitcoin- and cryptocurrency-dedicated websites and blogs wasted no time in pointing the way to hassle-free access to savings. Even though Wells Fargo suggested they had fixed the issue, customers continued to be shut out of their accounts on their computers or smartphones for days.

The company really didn’t need this problem after the most ironic case for cryptocurrency investors last year when Wells Fargo was hit with a USD 575 million settlement after scamming its customers over a period of 15 years; this after they had conducted their own poll of US investors in 2018, claiming a skeptical 72% majority “have no interest in ever buying Bitcoin” and 75% who find Bitcoin to be “very risky”.

As banking institutions race to upgrade systems, some admitting that blockchain may be a bonafide solution to the problem, outages continue to plague the banks. Both Mastercard and Visa went down in the space of a few weeks in July last year, both companies receiving a deluge of customer complaints from those unable to complete payments, along with a barrage of crypto tweets advocating Bitcoin.

In Europe, Spanish-owned British bank TSB also suffered a protracted meltdown in their system locking out customers for days costing the bank some USD 425 million and alienating account holders. David Thomas of cryptocurrency brokerage GlobalBlock couldn’t resist commenting on Wells Fargo’s latest misfortune:

“All manners of sardonic posts have been seen on social media channels following the event with many finding it hard to believe that in this day and age the infrastructure could be quite so antiquated and vulnerable to a melt-down.”

 

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UnionBank in Philippines Launches Crypto ATMs

UnionBank in Philippines Launches Crypto ATMs

Crypto adoption in the Philippines continues to take form with the Union Bank of the Philippines (UnionBank) launching a two-way cryptocurrency ATM under its sandbox program.

In a statement to local media outlet The Philippine Star, the bank said: “The bank’s continued quest to cater to the evolving needs and tastes of customers, including clients who use virtual currency, the ATM will provide these clients an alternative channel to convert their pesos to virtual currency and vice versa.”

The initiative is said to serve the purpose of allowing crypto users to buy and sell crypto for fiat, hopefully, increasing the adoption of crypto usage in the country.

The Philippines has been making strides towards becoming a crypto inclusive economy, as it pushes for crypto adoption on many fronts. Last week, the country’s regulatory body, the Cagayan Economic Zone Authority (CEZA) announced the provision of a set of rules that will provide clearer rules and guidelines for crypto innovation in the country.

More so, in a show of good faith, it gave 19 exchanges the permission to commence operation under the new regulatory framework.

The central bank had also been actively involved with crypto-related activities since last year. It had given permission to two of its commercial banks to transact cryptocurrencies, allowing them to exchange from cryptocurrency to Philippine peso.

The rise of ATM installations around the world has grown and continues to prove that crypto adoption is increasing despite the conditions of the market.

Last month, Bitcoin News reported how the installation of ATMs had gained traction in 2018 just as in 2017. With over 4,000 ATMs currently installed globally, sadly, only one had been listed in the Philippines before this latest one, according to data from Coin ATM Radar.

 

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HSBC Whistleblower Is Developing His Own Cryptocurrency

Hervé Falciani, the French-Italian whistleblower who helped track down tax evaders with 130,00 Swiss bank accounts in the 2008 Valencia Polytechnic University crash, is to launch a new cryptocurrency.

Falciani became renowned as the HSBC ex-employee turned whistleblower who provided several European countries classified information on thousands of Swiss bank clients who were evading taxes, most of which were managed by a subsidiary of his employers at the time, HSBC Private Bank.

He created what became known as the “Lagarde list” of HSBC account holders who allegedly used the financial institution’s services for money laundering and tax evasion, leaking the list to the current International Monetary Fund (IMF) head, Christine Lagarde, who was French finance minister at the time.

Continuing his anti-banking crusade, Falciani has now fallen back on crypto to clean up the financial space, by creating his own cryptocurrency – Tabu, which has been developed by ‘Tactical Whistleblowers’, a non-profit organization founded by Falciani.

To date, the Tabu token project has raised €1.3 million (appr. $1.47 million), however, an additional €2 million of capital is required in order to ensure adequate funding for the project’s ongoing development. Falciani’s mission is to cut corruption caused by what he sees as inefficiencies of the traditional banking documentation system, by also developing a blockchain powered registration system.

Tactical Whistleblowers, with its HQ in Valencia, is comprised of several academics with a strong background in Mathematics from the Valencia Polytechnic University.

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Bank of Korea: CBDC Could Threaten Commercial Bank Stability

CBDC Could Threaten Financial Stability of Commercial Banks, Says Bank of Korea

The Bank of Korea (BOK) has said that the introduction of a state-owned and issued digital currency in the form of central bank digital currency (CBDC) in South Korea could possibly zero-out commercial banks, reports Yonhap News Agency.

According to the source, the BOK published a report expressing concerns with low deposits demands into commercial banks that may result from the implementation of a state-backed CBDC into the financial system.

Kwon Oh-ik, one of the co-authors of the report, wrote: “The CBDC is a kind of a BOK-issued bank account. People trust it more than one in a commercial bank”. This implied that as customers are likely to trust the blockchain-based currency type backed by the BOK as opposed to the legacy form of money transfer and handling, this might lead to low liquidity in such commercial banks as customers withdraw their money. This would invariably shoot up interest rates.

Commercial banks are largely dependent on the loan infrastructure and if deposit services reduce, making it hard for the banks to have access to liquid cash for loan maintenance, then interest rates will then go up. Invariably, that may reduce patronage and consequently reduce the businesses of such banks.

Banks around the world have been discussing different application models for blockchain and cryptocurrencies. One such possibility involves CBDC, and talks about facilitating cross-border payment infrastructures. Banks have identified CBDCs as a government type of cryptocurrency which will constitute the exactness of a fiat currency.

At last, one thing some central banks around the world and crypto-enthusiasts could agree on is that a digital asset built on the blockchain could represent a store of value as well as a medium of exchange, and possibly capable of replacing the legacy fiat currency formats.

A CBDC could play a significant role in mass adoption of cryptocurrency. However, as exciting as that may sound for Seoul-based crypto enthusiasts, the South Korean central bank has a differing opinion.

The bank did say last week that it is not rushing into issuing a CBDC even though many financial institutions around the globe are more welcoming to the prospects of the financial instrument. The report published by the bank further reiterates its stance on the subject of CBDC.

 

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Credit Suisse Successfully Tests Blockchain for Cross-Border Payments

Investment Bank Credit Suisse Successfully Tests Blockchain for Cross-Border Payments

Swiss multinational investment bank and financial service company Credit Suisse confirmed today that its asset management arm which manages over USD 400 billion has successfully tested a blockchain-based cross-border transaction, as reported by Reuters.

According to the post, parties involved in the test — Portugal’s online bank Banco Best and Luxembourg-based order-routing platform Fundsquare — confirmed that a blockchain-based platform was used “to process an unspecified number of trades”.

The attestation stated that the test showed cross-border payment processing which was distributed over the blockchain and is more efficient, scalable and timely in processing.

According to the source, “the investment fund industry relies heavily on transactions and settlements that are often complex and time-consuming to process”, hence the need for a transition to a more secure and fast system to scale up processes.

As it stands, blockchain much-cited edge as a distributed immutable ledger becomes the preferred choice under the circumstances. The post also notes that because of the quality of the blockchain, fewer checks are needed to ensure entries are secure, which in turns saves time.

While the test was successful, the parent company made no comments on whether future applications of the technology will be expanded.

For banks and many financial institutions, optimizing cross border payment processes through blockchain is increasingly becoming an important use case of the blockchain.

Last December, UK fund processor Calastone said it could save up USD 4.3 billion using blockchain and would be moving its operations by May this year.

Recently, major Swiss exchange SIX said it was ready to launch its SDX trading platform using blockchain.

Saudi and UAE have reportedly been collaborating to develop a cross border payment system basically designed for bank-to-bank transactions only through the blockchain, and currently, have a select few commercial banks participating.

 

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Millennials Could Drive Crypto Industry by Ditching Banks

Millennials Could Drive Crypto Industry by Ditching Banks

The current levels of cryptocurrency adoption by millennials is seen by many analysts as a negative sign for traditional banking as more and more of this age group become disillusioned by the current financial system.

The general view borne out by much research on the subject is that millennials simply don’t trust banks. Research conducted last year by Edelman Intelligence, a global, research and analytics consultancy owned by Edelman, the world’s largest public relations company, showed that 77% of prosperous millennials feel the traditional financial system is “designed to favor the rich and powerful”.

The statistics are revealing, and that lack of trust led to the same nearly 4 out of 5 respondents to predict that another global finance crisis was imminent due to the banking system’s “bad behavior”. Another 75% were worried that the global financial system was at risk of being hacked, causing the respondents concern about the potential loss of their own private financial information.

Thus millennials are putting their faith elsewhere, as the figures illustrate: some 17.2% of millennials own cryptocurrency. According to Edelman’s study, a quarter of wealthy millennials own cryptocurrencies, a further 31% are interested in crypto, and a huge 74% put their faith in blockchain as a far safer system than the global financial space is currently able to offer.

Another survey by Sustany Capital showed that 88% want to invest in cryptocurrency and 42% like to “use cryptocurrency as savings”. The switch from conventional banking becomes more feasible for many given more education, with another survey revealing that 97% of surveyed millennials and generation X’ers said they would like to learn more about the workings of cryptocurrency. Many felt that they would be more likely to invest with financial advice demonstrating a potential professional gap in the market.

As millennials search for a whole new way of conducting their finances in a way where they can help themselves, rather than simply feed banking institution profits, cryptocurrency is becoming considered far more seriously than the early days where it was seen by this age group as just a hit or miss gamble.

As for Bitcoin’s stability, much disputed in 2018, Bloomberg shows that even with the price of the cryptocurrency dropping by 80%, the total number of users starting in the same period has doubled to 35 million.

 

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JPMorgan Strategist Predicts Impending Heightened Crypto Interest from Wall Street

JPMorgan Strategist Predicts Impending Heightened Crypto Interest from Wall Street

With much talk in 2018 regarding Wall Street’s potential cryptocurrency uptake somewhat fading towards the end of the year, JPMorgan’s Global Market Strategist Nikolaos Panigirtzoglou is reigniting the flame.

The market needs to grow first, claims Panigirtzoglou, predicting the long-awaited and much talked about rush of institutional investment, but it is not going to be an overnight sensation. He argues: “The stability that we are seeing right now in the cryptocurrency market is setting the stage for more participation by institutional investors in the future.”

Partly, the slow uptake, according to the JPMorgan strategist, is regulators who are still a “bit slow to realize” the potential of the industry. A recent Circle report agrees, pointing out how ICO activity reduced in the second half of 2018 due to increased regulation, putting further downward pressure on the cryptocurrency market.

report points out that stablecoins, security tokens, and institutional crypto, by providing the solution of real-world problems and adding more certainty to the crypto space as a whole, are the next big thing. Last year, Cardano (ADA) co-founder Charles Hoskinson predicted that the entry of Wall Street into the sector would bring in “tens of trillions of dollars”.

Late last year, Wall Street’s previous crypto fervor cooled noticeably, with Goldman Sachs, Morgan Stanley, and Citigroup all shelving much publicized crypto-related products for a future date. Twitter CEO Jack Dorsey is biding his time and certainly holding on to his Bitcoin claiming it is “native to internet ideals”, and as such must be successful. Always resolute in his claims, Dorsey insists that:

“The world ultimately will have a single currency, the Internet will have a single currency. I personally believe that it will be Bitcoin.”

That being the case, Wall Street won’t be too far away when it happens.

 

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Crypto Lender Completing $630 Million in 6 Months says Bitcoin Needs Killer App

Crypto Lender Completing 0 Million in 6 Months says Bitcoin Needs Killer App

Some blockchain firms have survived the so-called crypto winter, although many have been less fortunate but one blockchain-focused company thinks it has at least part of the answer to finding success in a bear market.

Celsius Network, an industry-leading cryptocurrency lending and borrowing platform, was created to leverage cryptocurrencies and blockchain technology to create a community which had the interests of the depositor at its heart, according to its CEO and founder Alex Mashinsky. He says he is achieving this through what he calls MOIP (Money Over Internet Protocol).

Clearly, he has found a successful formula, recording over USD 630 million in cryptocurrency loans in just six months, but he claims that “unbanking” should become a greater focus for depositors who are using the conventional banking system. The company’s approach is similar to the banks in only one aspect; it allows customers to take out loans or deposit coins, but there is a difference, as this banking alternative sees 80% of the income generated given back to the depositor every week. Mashinsky explains:

“When banks make a profit, they give it back to themselves or the shareholders, but nothing goes to the depositor. We are doing exactly what banks are supposed to do, but for the depositor rather than the shareholders.”

Now with over 16,000 registered users from over 100 countries the company claims to have paid Bitcoin (BTC) and Ether (ETH) interest to all its depositors every week since its launch. His hope for BTC is positive with quite a different spin on 2018 blockchain development statistics, arguing:

“And even after being down 80%, Bitcoin still proves to be the best performing digital asset class in the past decade. While 2018 was dominated with the dropping baton, Bitcoin continues to be adopted and new blockchain developers in 2018 have doubled.”

Mashinsky sees the future of Bitcoin in the hands of millennials, citing the swell of interest in South Korea with 90% of the country’s young already becoming cryptocurrency holders. He sees this future aided by the launch of a killer app which would attract the next 100 million people to crypto because, as he argues, “too many speculators have jumped in and there are not enough real users and institutions to get us to the next level of adoption and price”.

 

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