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Poland Reaffirms Crypto Exchanges Still Legal Nationally

The Polish Financial Supervision ‎Authority (KNF) reaffirmed the country’s position regarding the legality of cryptocurrencies this week, in reaction to media accounts suggesting Poland is looking to prohibit all activity on cryptocurrency exchanges.

False reports of a crypto ban

While Poland did announce a government-led investigation into cryptocurrencies, allegations reportedly made by mainstream media outlets suggested that Poland was looking to ban all activities on cryptocurrency exchanges.

The KNF released a statement on their website to put truth to the claims, stating cryptocurrency assets and trading are “legal on the territory of the Republic of Poland”, as reported by Finance Magnets.

It is likely that the media outlets wrongly interpreted the investigation as signaling a clampdown, which the KNF has assured citizens it is not considering right now.

Several crypto areas are regulated

Several specific areas of cryptocurrencies are regulated by Polish officials, however, in much a similar way to other European states that look to prevent criminal activity in the sector.

New EU regulations have required Poland to update its cryptocurrency laws in order to align them with anti-money laundering and counter-terrorism financial legislation, with the policies due to be enacted on 13 July.

Poland’s ban on initial coin offerings still remains, with authorities campaigning to educate citizens on the associated risks of cryptocurrency trading. The campaign notes a lack of regulation as a potential facilitator for fraudulent activities to take place.

Last month, Poland’s largest cryptocurrency exchange BitPay left the country for the Republic of Malta, citing a lack of cooperation from Polish banks as the cause.

While this announcement came as a surprise to many considering several Polish banks’ recent blockchain testing, it would appear the country still has a ways to go if it is looking to be seen as a crypto-friendly nation.

 

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Bittrex to Offer Select Clients US Dollar Pairs

US-based cryptocurrency exchange platform Bittrex has confirmed a partnership with several financial institutions that will allow select clients in the US to pair BTC/USD, as well as connect pairs for ‘stablecoins’ Tether and TrueUSD.

As reported by Bloomberg, the agreement will allow for now predominantly corporate clients in a limited number of states to purchase the nearly 200 digital tokens offered on the platform, using the US dollar directly.

Bittrex is working closely on the deal with New York-based Signature Bank alongside several other financial firms. Signature Bank will be responsible for holding the dollar-denominated funds.

Banks, regulations cryptocurrencies

Bittrex CEO Bill Shihara recently commented on the impact he suspects that this will have on the relationships between banks and cryptocurrency.

”It’s been a long path. It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance,” he said.

Purchasing cryptocurrencies directly with fiat currencies is becoming increasingly difficult as anti-money laundering (AML) regulations and know-your-customer (KYC) policies are being enforced by a growing number of governments.

These policies have in part contributed to a negative reputation that the cryptocurrency industry is paired with, disincentivizing many predominant financial institutions from offering related services for fear of risking their reputation.

While that is changing (notably Goldman Sachs announced earlier this month they are launching a Bitcoin trading desk), Bittrex’s actions are an important step in moving away from platforms that offer only ”crypto-to-crypto” services, meaning no fiat currency is involved in transactions.

Bittrex has confirmed that it plans to extend the offering to retail customers in the foreseeable future.

Several other banks have administrated similar deals. Prominent US cryptocurrency exchange Coinbase has reportedly developed close working relationships with Cross River Bank, Metropolitan Bank and Silvergate Bank in the US, recently securing a Barclays PLC bank account in the UK.

 

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7 Banks Join Infosys Blockchain Trade Finance Solution

Multinational technology service and consultancy corporation Infosys, has created a blockchain-based finance solution utilizing a document tracking system.

The platform is currently used by seven banks in India. This includes Axis Bank, ICICI Bank, IndusInd BankNSE, Kotak Mahindra Bank, RBL Bank, South Indian Bank and Yes Bank.

India Trade Connect

As reported by the Economic Times, the solution has been entitled India Trade Connect, providing a facility for banks to track shared documents on the blockchain via an accessible platform. Several of the banks involved with the scheme have already reached the production-phase, while the rest are still testing the project.

Speaking to the news site, the chief business officer at Infosys Finacle, Sanat Rao, commented: “Trade financing is document-heavy and process-heavy. The blockchain solution allows this to happen in a digitized manner. Because of the network effect, where a buyer, the buyer’s bank, the seller and the seller’s bank are all on the platform, it creates a single source of truth.”

Rao continued to discuss the future prospects of the solution, outlining Infosys’ plans to include other lenders in the network, such as the Indian arms of international banks. International trade transactions are also on the cards in the foreseeable future, with talks already in motion with entities in Hong Kong and Singapore.

Infosys executives said that work on the India Trade Connect platform began last year. Rajshekhara Maiya, associate vice-president of Infosys Finacle product strategy, told the Economic Times: ”We are also in talks with the Reserve Bank of India for [the platform]. Regulatory overview of transactions typically happens as a post-mortem but if the regulators are party to the network, they can have a real-time view.”

It is still early days for the blockchain platform, with Infosys noting that the banking model is still flexible. Financial institutions involved are required to pay an initial fee when they enter the testing stage, with the latter stages necessitating either a purchased license or subscription revenue.

 

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Ripples xVia Continues to create New opportunities

UniPAYExchange4FreeFairFXRationalFX, and MoneyMatch are among 5 new customers to adopt Ripples xVia API solution to power payments.  xVia provides a payment platform for less developed countries with emerging markets so they can make faster payments and mitigate manual reconciliation costs.

Emerging markets

Emerging markets often have some aspects of a developed market, but don’t necessarily have a high income, many opportunities for foreign investment, capital flows, or any other developed qualities. The four largest emerging markets are Brazil, Russia, India, and China.

These markets currently face obstacles for global payments as they do not have financial systems in place to that of more developed countries. They are often reliant on banking systems outside their own countries so they can take part in global commerce. Digital commerce in these emerging markets is growing with more businesses looking to join the global economy. Hedge funds in the fourth quarter for China and India, were up 20 percent,  reaching USD 230 billion in assets under management.

Africa currently is dependent on mobile money for its primary method of commerce. Vietnam is quick to follow China with growth in e-commerce and is looking to digital wallets as a means for cross-border payments. South East Asia’s digital trade is rapidly growing with almost 30 percent of online sales made over social media.

Shaping the future of global commerce

Millions of new businesses and people are all looking to access the global market. India is set for more than a billion new people to be interested in banking over the next five years. With transaction times growing, a higher demand for financial services we need to improve the way in which we exchange currency around the world. “Ripple’s goal is to provide a fluid flow of money that can help provide the opportunity both into and out of emerging markets, but also broadly around the world.” Blockchain technology has the ability to create a decentralized solution to improve global commerce.

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Quebec Government Defends Bitcoins Liberty

The Chief Scientist of Quebec, Rémi Quirion, has published a report on Bitcoin, taking an in-depth look at the state of legality that Bitcoin faces on a day-to-day basis. It finds no direct link between Bitcoin and criminal activities.

Quirion disagrees with accusations such as that by BlackRock CEO Larry Fink who labelled Bitcoin as “an index of money laundering”, saying that Bitcoin’s distributed ledger technology has helped law enforcement agencies track down illegal activities with ease.

“Bitcoin is not above the law, nor is it a magnet for illicit transactions: it forms only a tiny part of the criminal money circulating around the planet. The reason: it is less attractive for anyone who wants to make transactions without leaving a trace,” said Quirion.

The Center for Sanctions and Illicit Finance of the Defense of Democracies Foundation’s study found that funds linked to criminal activities accounted for only 0.61% of money entering the cryptocurrency ecosystem.

The percentage of Bitcoin transactions as a whole related to money laundering has decreased over the last five years, from 1.07% to a minuscule 0.12% in 2016.

The report cited that Bitcoin was still unregulated, although the Quebec government insists that companies must obtain a crypto specific license before operating a cryptocurrency exchange in the country.

While these figures might challenge commonly-held views about Bitcoin, they come as little surprise to veteran Bitcoin users. Others argue that fiat currency, in particular, the US dollar still ranks highly as currency favored by criminals.

 

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Santander’s Application Takes Blockchain Mainstream

Santander has claimed that its upcoming blockchain phone app One Pay FX can speed up international payments between multiple countries, in a process that will require “3 clicks and 40 seconds” to complete.

It is set to be initially available in the UK, Brazil, Poland, and Spain with plans to expand to more countries in the near future.

Santander’s blockchain application development

One of the world’s largest banks, Santander’s UK business sector and San Fransisco-based Ripple have been developing the international payment app since 2016. Back in January, the company released a presentation with details of a phone app and the use of blockchain and distributed ledger technology.

Ripple, a cryptocurrency built for enterprise and banking, aims to provide fast global payments, low transaction fees and other beneficial factors like blockchain security. It also looks to implement more bespoke functionality for the industry, which isn’t necessarily required by other coins.

xCurrent is the financial institution software solution currently provided by Ripple, offering end-to-end tracking and bi-directional messaging. Ripple claims many other features and qualities such as scalability which make it well suited for the banking industry.

Santander's Blockchain phone App
Credit: Santander Presentation – www.santander.com/csgs/Satellite/CFWCSancomQP01/en_GB/pdf/Earnings_Presentation_ENGLISH_4T17.pdf

Future banking built on blockchain

Although Santander is at the forefront of the technology, plenty of others are already working towards similar solutions using blockchain. With PKO Polski recently creating a partnership with Coinfirm and Toronto-Dominion (TD) bank applying for blockchain patents, there is a growing transition of organizations moving towards crypto-space.

A consortium in Japan is currently looking to bring in some 60 banks which are responsible for the majority of the countries financial assets (80%) to the blockchain age using Ripple’s technology.

Current bank transfers take two to four days to clear due to checks for fraudulent behavior, but blockchain looks to speed up the process while maintaining security. The use of blockchain also presents the opportunity to implement artificial intelligence which can now work with encrypted data as well as monitor and analyze transaction patterns.

 

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Bitcoin a Response to Traditional Banking Failings, Says Ex-Goldman Sachs Analyst Bernstein

Ex-Goldman Sachs economist and founder of Tetras Capital, Brendan Bernstein, recently spoke out on his belief that not only is Bitcoin not a bubble but it is, in fact, a response to the bubble created by traditional banking.

Bernstein asserted his case via a series of Tweets on Tuesday, where he focused on financial history since the 1970s. He made the claim that during a time major players such as China and the US have engineered bubbles through their central paradigm of debt.

Citing Mckinsey, Bernstein noted that since the height of the financial crisis in 2009, global debt has increased by USD 57 trillion. He sees China as particularly problematic, as its impractical focus on a 6.3% GDP growth has led debt to skyrocket. Its bank asset growth has reportedly been 450% since 2008, now reaching USD 40 trillion.

Comparatively, the US has USD 17 trillion of bank assets.

In one of his tweets, Bernstein noted the unsustainability, not in the value of Bitcoin but in global debt, bond prices and USD hegemony among other issues.

18. What’s unsustainable isn’t BTC price but instead is:

– The welfare state
– Arms race of currency devaluation
– USD hegemony
– Global debt
– Bond prices
– S&P 500 prices
– China debt
– Global peace
– Low volatility
– Political chicanery and micromanagement

— Brendan Bernstein (@BMBernstein) April 10, 2018

Turning to Bitcoin

The argument from Bernstein echoes the sentiment of analyst David Draper, who predicted Bitcoin to recover and increase its value by the end of the year as institutions begin to see the benefit of investing.

Speaking to Bitcoinist last week, he noted, ”It is logical when institutions put money into crypto because their investments are 1,000x to 10,000x bigger than the average Joe and they will rise. And institutions are going to have to put their money in Bitcoin”.

Bitcoin has still been receiving negative coverage from mainstream institutions and outlets, however. UK bank Barclays this week described Bitcoin’s volatility as an ”infectious disease”. Time magazine also described the potential legalization of Bitcoin ETF’s in the US the ”clearest sign yet the Bitcoin bubble has to burst”.

There is clearly a different paradigm of thinking between Bitcoin proponents such as Bernstein and Draper, and those championing the more traditional path of finance. This makes it a challenge for Bitcoin to receive support from the more orthodox institutions and outlets that still promote more conventional forms of banking.

 

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Argentina Leads the Way with Bitcoin Day

A Bitcoin Day conference which took place last week in Buenos Aires attracted some 500 cryptocurrency enthusiasts.

Argentina and Bitcoin were once described as a “match made in heaven”. Its financial and economic history is a fragile one after suffering numerous rounds of inflation; hyperinflation of 20,000% in the late 1980s being the South American country’s lowest economic moment.

Bitcoin has been greeted in Argentina with enthusiasm partly because countries with histories of inflation and devaluation of their currencies see the digital currency as one that can conserve the value of user investments and savings. After President Cristina Fernandez de Kirchner‘s tightening of currency controls debased the Argentine peso (ARS) in 2012, Bitcoin has gained increasing popularity.

In 2017, the volume of Bitcoins traded in Argentina increased to a record 2.1 million ARS, quadruple the volume of the previous year, against a backdrop of a growing fintech market.

Chile looks to its neighbor Argentina as an indication of how the cryptocurrency climate can be improved on the continent, avoiding mistakes which have been made elsewhere. Bitcoin exchange Buda’s CEO, Guillermo Torrealba, is making an effort to achieve banking support in Argentina: “There are even banks here that have executives that are exclusively dedicated to cryptocurrency companies.”

The closing of cryptocurrency exchange accounts in Chile over recent weeks by the Chilean State Bank demonstrates Argentina’s forward-looking approach to the use and adoption of digital currencies. But this is not necessarily going to become the status quo elsewhere in South America.

CEO of digital notarization platform Signatura, Gonzalo Blousson, acknowledged that progress is being made in Argentina due to the registration of official bulletins on blockchain, commenting that “We used to call the companies to tell them what blockchain is about. Today they call us…”

Speaking at the Bitcoin Day conference, Carlos Maslaton, head of treasury at wallet provider Xapo, indicated that he was satisfied with the current dialogue on how financial institutions were wary of Bitcoin because he felt it “generates competition” in financial markets.

 

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Swiss National Bank Remains Cool Towards Crypto

In a speech in Zurich last week, Andrea Maechler, governing board member of the Swiss National Bank (SNB), suggested that blockchain technology had “potential”, but cryptocurrencies still weren’t “comparable with money”.

In recent years, Swiss banks have been reluctant to have anything to do with cryptocurrency firms. Despite Switzerland’s tradition of banking secrecy which dates back to the Middle Ages, a new banking “secrecy”, distributed ledger technology (DLT), has been of little interest to major banking players in the Alpine country.  Some smaller banks have introduced cryptocurrency asset management schemes over the past few years but the larger banks remain skeptical.

Outside of the banking sector, the Swiss have warmed to digital currencies. Dozens of startups have used blockchain technology to raise millions of Swiss francs through initial coin offerings. In Zug, 30 kilometres south of Zurich, huge amounts of digital currencies have traded daily since 2013 at Crypto Valley.  The organization is self-described as being an “independent, government-supported organization… dedicated to developing and executing a community-driven program targeted at establishing and growing our ecosystem”.

Maechler’s address highlighted the fact that SNB was still concerned about the “risks” behind “new innovations”. Referring to blockchain technology, she indicated that banking security was particularly important in the current Swiss banking system although the bank welcomed “innovations which advance efficiency”.

The co-existence of two systems within the Swiss banking system was another area of concern. Meaechler suggested that “should DLT take hold in securities settlement, the question would then arise as to how DLT-based securities systems and conventional central bank systems can coexist”. She argued that it would be the market that would decide “which technologies and solutions would prevail”.

Her final comments would offer little solace to those in Switzerland’s cryptocurrency environment looking for more cooperation between crypto exchanges and banking sectors. Viewing any synergy as a matter of “debate”, she suggested: “Digital central bank money for the general public is not necessary to ensure an efficient system for cashless payments. It would deliver few advantages but would give rise to incalculable risks with regard to financial stability.”

 

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Pakistan Central Bank Curbs Crypto

Pakistan’s State Bank (SBP) has issued a statement which confirms that financial companies are now barred from working with cryptocurrency firms in the country.

The SBP website’s statement confirmed that all banks in Pakistan “are advised to refrain from processing, using, trading, holding, transferring value, promoting and investing in virtual currencies or tokens… any transaction in this regard shall immediately be reported to the Financial Monitoring Unit (FMU) as a suspicious transaction”.

Pakistan’s FMU sees its goals as developing a strong reporting culture amongst financial institutions, making a contribution towards fighting money laundering and terrorist financing. It also sees itself as a recognized model of financial intelligence gathering, analysis and dissemination in Pakistan.

In the wake of this announcement, there has already been an impact on the industry in Pakistan. Urdubit, an exchange which was first launched in 2014, has shut down. Users attempting to access the platform today will be greeted with a screen message, “Urdubit is Shutting Down”, warning its users to withdraw their funds “as quickly as possible” due to a “State Bank of Pakistan prohibition on dealing with virtual currencies”.

Rodrigo Souza, co-founder of BlinkTrade, the provider of Urdubit’s open source software, suggests that governments and banks will fight Bitcoin due to a potential run on the central bank.

The news of Pakistan’s curb on cryptocurrency trading comes just a day after India’s announcement on Thursday that The Reserve Bank of India (RBI) was now strictly prohibiting all banks and regulated financial entities in dealing with cryptocurrencies. On the news of India’s announcement, the price of Bitcoin plummeted to a low of 350,000 Pakistani Rupees  (USD 5,392) against its international market price of USD 6,617 according to cryptocurrency exchange Coinome.

Following yesterday’s ban the Pakistani government has indicated that those using cryptocurrencies to transfer funds outside Pakistan could be prosecuted. The SBP declared “no entity is currently licensed or authorized by SBP  to offer money remittance services and products in Pakistan using virtual currencies/coins/tokens”.

 

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