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Binance CEO Predicts 1,000 Times Swell in Crypto Market

As the crypto community discussed the future of the market this week, Binance CEO Changpeng Zhao has disagreed with recent remarks by Vitalik Buterin, suggesting that the Ethereum founder’s comments about a squeeze on cryptocurrency growth are completely wrong.

Buterin has denied that he made exactly those comments, Tweeting, “I never said that there is no room for growth in the crypto ecosystem. I said there is no room for 1000x price increases.” Buterin has claimed that the crypto market has practically reached its ceiling.

Further explaining that a thousand-fold growth would equal to 70% of the world’s entire wealth seems to have done little to halt Zhao’s charge that cryptocurrencies will go mainstream over time, and thereby reach exactly that level of growth and possibly more.

Zhao maintains that Buterin’s mistake is to view such a huge level of growth in terms of the traditional financial market, in which such a market expansion would be totally unrealistic. He feels that cryptocurrency is capable of making such an impact once it becomes fully operational with an accompanying derivatives market in full sway. He argues:

“I will say ‘crypto will absolutely grow 1000x and more’! Just reaching USD market cap will give it close to 1000x, (that’s just one currency with severely restricted use case), and the derivatives market is so much bigger.”

It is the case now that more central banks are on board with, or if not, certainly examining, cryptocurrencies with more than just a passing glance, and as such, the industry is gaining respect. Blockchain technology is now becoming influential in banking and business at the highest level, having gained respect from some of the world’s major players such as IBM and Microsoft. As central banks begin to delve deeper into the space, it is highly likely that smaller banks will also begin to take an active interest.

The more positive the impact that cryptocurrency makes on the financial system, the more that regulation is likely become not only clearer but more accommodating as crypto becomes the normal way to conduct business.

This is more likely to be the scenario that Binance’s head envisages in making such predictions; thinking of the big picture rather than the status quo. A USD 200 trillion market would make cryptocurrency the main source of payment and would certainly make stock markets around the world look very different. Clearly, a scenario that Zhao sees as achievable.

 

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Number of Australian Crypto ‘Hodlers’ Tripled Since January

Results from a recent study show that the number of Australian citizens with some form of crypto asset holdings has tripled since the beginning of 2018.

The survey was conducted by cryptocurrency trading brokerage HiveEx, which found the number of Australians ‘hodling’ crypto assets to have increased from 5% in January to 13.5% when it was reviewed in August. The survey further revealed that 50% of these individuals had these crypto holdings for investment purposes, whereas 34% said it was due to FOMO, and 26% replied that they were saving for retirement. Over a third of the respondents said that they planned to use cryptocurrency to pay their tax bill, and 80% claimed that they would be happy to use it in their day to day spendings if it were easy to do as in the case of local fiat.

The responses from Australian citizens who did not own any cryptocurrency were not as positive. While 65% of them said this was because they did not understand it or how to use it, one in five said they thought it was either a scam or a bubble.

Growing crypto infrastructure in Australia

One of the country’s youngest self-made millionaires and entrepreneur Fred Schebesta does not think the year’s relatively poor market performance has deterred investors. As a co-founder of HiveEx, he said that interest in cryptocurrency is actually far higher now than during the bull run in the latter part of 2017.

“At its core, you’ve got to remember, just because the price of bitcoin has gone down and people feel angry, that doesn’t reduce the interest,” Schebesta said speaking to a local news outlet. He continued on to compare Bitcoin to gold, speculating that it will continue to be a valued resource, standing the test of time.

Similar to the internet in 1996, Schebesta believes interest levels are ”100% growing.” To help provide for the growing sector, he plans to build what he calls a ”crypto bank of Australia” and offer custodianship, cold storage, escrow and exchange services.

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Nigerian Banks, US Tech Firm Tackle Financial Exclusion with Blockchain

National Nigerian banks have teamed up with US-based software development company Hashcash to combat the African nation’s widespread issue of financial exclusion through a blockchain banking implementation.

The collaboration aims to promote economic growth by banking a large number of the mainly rural residents that do not have accounts, as well as offer more efficient methods of transferring money. Right now, the primary method of delivering cash outside of towns and cities relies on bus transfers, a situation that is highly vulnerable to pillaging en route.

Across Nigeria, there is a lack of traditional bank branches and technology such as desktops for citizens to access their bank accounts. Mobile phones capable of managing blockchain wallets are, however, something most Nigerians do have in their possession, making the project to overturn economic exclusion a highly feasible solution for success.

What can blockchain banking bring Nigeria?

Blockchain banking can improve the situation for unbanked Nigerians by allowing them to make financial transactions of any size to another individual with a blockchain-backed wallet, no matter the geographical location of both parties. This adds enhanced security over traveling across the nation that is suffering from civil disruption with cash, also saving people the time they would take to physically travel.

Another benefit that blockchain provides is transparency over the movement of finances, something NGOs have been fighting for because a lack of evidenced bank transactions can hinder demographics that are attempting to move into the larger economy. Take, for example, the difficulties of renting a property in a major city without providing your banking history. Blockchain banking solutions in Nigeria have the potential to increase productivity with a nearly immediate effect while supporting the empowerment of women and marginalized communities who can not access traditional bank accounts in the country.

Blockchain in developing nations

Blockchain solutions have been touted by many experts as key in helping developing nations progress through the technology’s fundamentals of transparency, security, and accountability. David Crosbie, a lecturer at the University of Pennsylvania, said earlier this year that the decentralized technology can also bring developing states the same levels of convenience that countries such as the US take for advantage. Crosbie’s analysis focuses fundamentally on bringing trust to these societies in order to bring about progression.

 

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Japan’s Largest Financial Group Trials Own Cryptocurrency

One of the world’s largest financial groups, Japanese company Mitsubishi UFJ Financial Group, has been trialing its own cryptocurrency.

The company has made its own Mufg coin available for payments by employees at its headquarters own convenience store in its Tokyo HQ. The experiment is said to be going well according to the company and “is quietly advancing” as Mitsubishi UFJ tests out whether either purchasers or merchant come across any issues.

Employees use the coin by simply scanning a QR code on their smartphones at checkout. The coins can also be used to exchange money between workers at the store. The coin is currently pegged to the Japanese yen at 1:1.

The company is carrying out the test to examine how blockchain may improve transactions such as payments and withdrawals, commenting:

“Potentially this coin could have large-scale commercial potential, as well serving small-scale retail bank customers. Other than Mufg coin, Mufg is testing another untitled digital currency rewards [program] for employees who reduce their overtime hours and practise a healthy lifestyle.”

Mufg has total assets of JPY 306 trillion (USD 2.76 trillion). Mufg Bank is Japan’s largest, operating in 40 countries outside of the country. The fact that that the bank is looking at looking at an internal cryptocurrency payment system, with a view to its wider applications within the company’s overall system, is sure to make significant ripples around Japan’s financial and banking sector.

The company stated that one reason for the coin trials stemmed from their obvious simplicity of use and convenience when compared to that of traditional fiat currency and banknotes, also providing the user and merchant a low-cost transaction option. These coins would offer the user “instantaneous transfer capabilities”.

Last year, Mufg president Nobuyuku Hirano suggested when the trials were forecast that the bank was planning to “overcome issues of virtual currencies and create a highly useful currency”. This is another indication of how Japanese acceptance of Bitcoin has filtered down to large corporations who are now beginning to examine cryptocurrency’s potential within financial systems in the country.

 

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Bank of America Has Patent Pending for Crypto Storage Technology

Multinational investment and financial services bank, Bank of America has applied for a patent that covers a cryptocurrency storage system for use by custodians.

Specifically, the application describes a computing device that can manage blockchain encryption tags and handle a substantial number of daily transactions.

The US Patent & Trademark Office published details of the application on Thursday following its initial filing in April. It outlines a system of entrusting cryptocurrency accounts’ secured private keys to a custodian third party such as a bank. It appears to anticipate a future where the general public has mass adopted cryptocurrencies and require traditional banking services for their assets.

Describing its place and necessity in the future of financial services, the application reads: ”As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to securely store cryptocurrency.” The Bank of America began its development of this online cryptocurrency vault system in 2014.

Don’t Take This as a Pro-Crypto Stance

While Bank of America may have applied for dozens of blockchain patents (several including cryptocurrency solutions) and invested substantially in blockchain research, top executives at the firm have open criticized Bitcoin on multiple occasions. The chief technology officer called it a ”troubling” payment system due to what she referred to as the lack of ”transparency” that makes it more challenging to catch wrongdoers in the system.

Clients of the bank have been barred from using its credit cards to purchase cryptocurrencies. Bank of America’s latest annual report references cryptocurrencies as a threat to its business model; apparently, it sees the way to combat this is as to get ahead of the game and monetize cryptocurrency use cases via patenting innovations.

The report warns of concerns that people will turn to alternative investment methods outside of its jurisdiction, reading: ”clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies.”

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Study: Blockchain Can Save Banks $27 Billion per Year by 2030

Market intelligence firm Juniper Research has published the results of its blockchain study, with the findings showing financial institutions are set to save USD 27 billion annually by 2030 should they utilize the technology.

The cost reduction for cross-border settlement transactions is shown to be reduced by over 11% when deployed on blockchain.

#Blockchain deployments to save #Banks more than $27bn annually by 2030, with cost reductions not just in #Payments processing and reconciliation, but in treasury operations and compliance. #Fintech #Banking

Read more in our press release: https://t.co/pNWXeopbjO pic.twitter.com/pYk2PYsISQ

— Juniper Research (@juniperresearch) August 1, 2018

The Future of Blockchain: Key Vertical Opportunities & Deployment Strategies 2018-2030 study also investigates alternative areas where the technology could create more cost-effective practices, including in treasury operations. The savings applicable for banking departments varies; in areas of compliance, automated money laundering checks via blockchain could create a 50% price decrease in just a few years.

Internal banking legacy systems that will most likely be required to run alongside any blockchain tech services may, however, cause the savings process to take several years to be fully implemented. Estimated service cost savings are not expected to reach USD 1 million per annum until 2024.

The full research paper can be purchased from Juniper online.

5 industries benefiting from blockchain

Besides the banking industry, the report notes the benefits of utilizing blockchain technology in a number of other sectors, including food exports and trades, as has been seen in a number of cases already including in the Australian sugarcane industry. The report estimates a nearly 50% cut in the food industry’s costs associated with fraud.

Juniper Research has also released a free white paper detailing five industries that will benefit from blockchain, including land registry, healthcare, and the automotive sector, entitled ‘5 Industries That Will Fuel the Blockchain Boom’.

It splits the research into eight key regions, including the key challenges each industry will face on the way to adoption and the top movers and shakers of the blockchain sector in 2018.

 

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IBM, Barclays, Citi Create Blockchain App Store for Financial Services

American technology corporation IBM has teamed with banking giants including Barclays and Citi to create an app store style platform for financial blockchain services.

The LedgerConnect project aims to increase efficiency in banks’ ability to access and utilize blockchain solutions from fintech and software developers, offering services in areas of market data, know your customer (KYC) processes, collateral management and sanctions screenings. Nine financial institutions were part of the proof-of-concept of the app for use by their peers.

Trying something new

Those behind the LedgerConnect project say it will benefit users by pre-approving and certifying applications as secure to be used, potentially saving research costs for banks looking for blockchain services. Dr Lee Braine of Barclays noted that a hub such as this gives banks a chance to try something new in the area, allowing them access to the various deployment options of distributed ledgers in banking, and experience in combining infrastructure-hosted and bank-hosted nodes in the private network.

The hub itself runs on IBM’s blockchain platform, offering just Hyperledger-based applications for the time being, although the founders are looking into hosting alternative blockchain solutions, citing R3’s Corda and Quorum as viable options so long as they meet the security specifications.

A good thing for start-ups?

Should the hub find success in the sector, it will not only be beneficial for the banks using it, but also for the blockchain companies whose services are being advertised. By addressing a connectivity gap as the project says it is, the number of blockchain trials by big banks such as those the Bank of Canada has become known for may decrease, allowing smaller start-up firms to have their own solutions employed by those entities.

It could, in fact, encourage further research and applications be developed now there is an easier way for their work to be advertised and used by financial institutions.

 

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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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