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Cryptocurrency and Blockchain Makes a Difference in Africa

Humanitarian Blockchain

a BitcoinNews.com series

   Part 4: Cryptocurrency and Blockchain in Africa Is Making a Difference

Both cryptocurrency and blockchain have a part to play in empowering African leaders to inject growth and financial inclusivity into their economies. Individual and local empowerment by taking responsibility for water, electricity, banking, IT, communications, education, local elections, and research are all achievable, as shown by a growth in crypto and blockchain projects in these sectors around the huge continent of Africa. Bitcoin News explores how some projects are making a difference.

Globalization has arguably transpired at the cost of the African nations, which primarily exports raw materials rather than manufactured goods that hold the larger profit margin. Cryptocurrency is an opportunity for the citizens of Africa to enter the global marketplace, investing in entrepreneurial ventures on a scale previously inaccessible.

The application of blockchain-based solutions to small local run enterprises may be a way of breaking the chains of corruption, exploitation by multinational industries and corrupt national governments for many Africans. The reason for using blockchain is that it is secure and transparent in nature. No individual or single entity can alter entries on the distributed ledger.

Connectivity

Connectivity is essential across Africa if it is to address the disparity of those that have and those that don’t and attract business from overseas. A new report by the International Telecommunications Union (ITU) has outlined that Africa will need to invest more on internet connectivity in order to maintain the continent’s current pace of cryptocurrency adoption.

Using the Sun

Solar power needs to be utilized more readily across some of the poorer and more remote parts of the continent. A project by Sun exchange is addressing this problem. AfricaPowerhive will be the beneficiary of funds generated from the sale of Sun Exchange’s SUNEX rewards tokens by public sale. The money will then be spent on developing solar-powered mini-grid projects in Sub-Saharan Africa.

The project will allow for the used solar panels to be sold off later to Sun Exchange members who will, in turn, own the cells used in the projects and subsequently profit from a sustained period of “solar-powered money”. Sun Exchange founder and CEO Abraham Cambridge said in a press release that:

“Together, we are working towards a world where no one is forced to cook with unsafe kerosene or wood-burning stoves, no child has to worry about how they will study after dark, and lack of energy access ceases to propel cycles of poverty.”

Building Schools

Education is an area being tackled using crypto in Rwanda where an NGO and a cryptocurrency platform are planning to construct a school by using only cryptocurrency funding.

The non-profit organization, Zam Zam Water, in a cooperative project with Peer-to-Peer finance platform provider Paxful is aiming to raise $100,000 for an education center. The project will be implemented in Rwanda’s Bugesera District, complete with full-time teaching staff.

The raising of estimated building costs of around $100,000 has been started for the new project with a donation of $20,000 from Paxful. The remaining funds will be raised through online crowdfunding. Cryptocurrency donations via Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Dash will be matched by the crypto platform’s BuiltWithBitcoin initiative until the necessary funds have been raised.

Banking

Out of the 20 countries with the highest fiat inflation according to the CIA World Factbook, 13 of them are in Africa. South Sudan has the worst inflation rate in Africa, over 100% per year, with Congo, Libya, Angola, Sudan, and Suriname having yearly fiat inflation in excess of 20%. Burundi, Mozambique, Sierra Leone, Nigeria, Egypt, Malawi, Liberia, and Ghana, have yearly fiat inflation rates in excess of 10%.

Additionally, a large fraction of Africans doesn’t have banks or access to the financial system. For example, in Sub-Saharan Africa, only 43% of those 15 or older have bank accounts, versus 69% in the rest of the world. Cryptocurrency can provide the financial infrastructure that Africans desperately need but don’t have access to.

Lady Victoria Walker, CEO of the United Digital Currency Reserve Foundation and UK based fintech entrepreneur feels that new technologies such as blockchain and cryptocurrency are essential factors in empowering African leaders to inject growth and financial inclusivity into their economies. She argues:

“Bitcoin is a reality. We have all major world governments scrambling to make sense of it and world leaders sharing their views on the currency. For the past 700 years, our world has relied on the European legacy banking system for means of payments and transactions. Bitcoin is definitely challenging the traditional way when it comes to the transfer of value. Just like the internet changed how we shop, bank, date and find information.”

Solutions are there, such as Africa-focused cryptocurrency exchange called Coindirect. Co-founder Stephen Young says that Africa has unique problems and these must be considered in any startup plan for cryptocurrency adoption on the continent. He feels that current exchanges don’t take these into consideration. In terms of African fiat currencies, Young identifies their systemic volatility, insecurity and lack of governance as factors that the crypto space need to take on board: He argues:

“If Africans are to benefit from the cryptocurrency revolution we need make it easier to buy, store and trade cryptocurrencies. As Africans, it is our responsibility to help build the infrastructure and we need to be a part of the revolution.”

Although cryptocurrency isn’t a solution to all of Africa’s economic instabilities, it is a marketplace full of innovations that have the potential to diversify and better the economy of the continent.

Skeptics have argued that it has been lenders who have historically benefited from microloans, due to non-restrictive or in some instances a complete lack of barriers, which often translate to high-interest rates. The application of blockchain-based solutions to these loans is increasingly being cited by business as a way of addressing other microloan issues such as large overheads, slow delivery, and corruption. The reason for using blockchain is that it is secure and transparent in nature. No individual or single entity can alter entries on the distributed ledger.

An IBM pilot project, developed at the IBM Lab in Nairobi, uses Hyperledger Fabric, a blockchain framework implementation that acts as a bedrock for developing applications and solutions. The project simply requires African users to own a mobile and need capital to grow their business. The IBM blockchain program aims to fill the finance gap so small ventures can flourish on the African continent.

Andrew Kinai, the lead researcher at IBM research, suggested that the aim of the program was to offer the opportunity for small businesses to participate in an interdependent ecosystem based on SMS. Users, some with limited IT literacy would be better positioned to access financing for their orders.

Bribery

In Kenya, misappropriation of funds and fraud at a local level has been a huge problem, with the police, local leaders and utilities all taking bribes. Blockchain is now the last attempt at addressing some of these local issues after years of mismanagement when it was realized that other methods were prone to illegal intervention. A new local building product will be its first use-case. The National Housing Fund under the Finance Act of 2018, to which Kenyans contribute 1.5 percent of their salary, will be responsible for the new blockchain-backed building project, with further financial support from employers.

Also in June, decentralized liquidity network Bancor, in partnership with the non-profit foundation, Grassroots Economics, launched a network of blockchain-based community currencies in Kenya aimed at combating poverty. The project seeks to stimulate local and regional commerce and peer-to-peer activity by enabling Kenyan communities to create and manage their own digital tokens.

Future

There are many reasons why Africans are beginning to turn to cryptocurrencies rather than traditional currencies. Many nationals fall foul of inflation and hyperinflation, resulting in weak and unstable financial systems. Recently, countries such as Zimbabwe, South Sudan, and oil-rich Nigeria have all suffered, many of these countries with inflation rates well into the hundreds of percentages. In these situations, it is hardly surprising that populations look to a more stable form of monetary solutions in their daily lives.

Africa has huge challenges ahead, but with the help of blockchain technology, businesses can be transformed using more efficient ways of working. Blockchain can move Africa forward, simplifying existing systems and processes to lower costs. Blockchain can help reduce fraud, enable fast transactions,  secure supply chains while maintaining transparency. It also removes human error and inefficiencies from a continent which is still developing.

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Catalonia Independence-Fund Donations Now Exceed 80,000 Bitcoin

The support fund started after exiled Catalonia leader Carles Puigdemnot’s plea for financial support this year is reportedly gaining some ground.

According to Spanish news outlet El Confidencial, officials have now reportedly collected 80,000 BTC in support of exiled politicians. Current claims suggest donations of 81,000 BTC, although the exact number is difficult to confirm.

Catalan politicians who incited a break away from Spain last year and used public funds to organize an independence referendum which the Spanish courts had declared unconstitutional are either now in exile or in prison. The fund was organized by Carles Puigdemont who is currently living in exile in Belgium. Once the former Mayor of Girona, Puigdemont served as the President of the Government of Catalonia from January 2016 to October 2017.

The donated funds are to go towards legal support for those politicians who fled after the Spanish government decided to act against the renegade Catalonians last October.  Funds will also be used towards the security of some of the exiled politicians and activists involved in last year’s push for Catalonian independence.

The fundraising website was registered in the Caribbean state of Saint Kitts and Nevis by the co-founder of torrent tracker Piratebay, Peter Sunde. The Bitcoin wallet address for fund donations, posted on Reddit, shows transfers of more than 81,300 BTC, but as of October 19, the balance was 51.176 BTC. However, El Confidencial noted how “no report on the management of the funds has been presented” in over six months. It also said there has been no word about who is on the independent council.

Meanwhile, Spain has hit a wall in terms of its own crypto/blockchain aspirations following the ousting of Prime Minister Rajoy back in June and replacement by Socialist chief Pedro Sanchez as a result of a no-confidence vote following corruption charges aimed at the ex PM’s center-right People’s Party.

The Sanchez-led no-confidence vote may delay the current pro-crypto legislation, which had been scheduled to go to a vote by 7 July after public consultation on 7 June. New elections could delay legislation for more than six months.

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Bermuda Launches First ICO as Premier Leads From the Front

Bermuda is increasing its cryptocurrency profile, having approved certification for the island’s first Initial Coin Offering (ICO).

Minister of National Security Wayne Gaines announced that fintech company Uulala was to be the island’s first, under the government’s new legislation designed to regulate cryptocurrency and blockchain ventures.

The new legislation put into effect by the Premier and Minister of Finance of Bermuda David Burt now requires companies issuing ICOs to register details regarding all participants, the project itself, target audience and proposed funds targeted for ensuring its success, along with further technical details.

Also, recent changes to the Banking Act will create a new class of banks that will work specifically to cater to blockchain and fintech companies, combating the current dismissive nature of the banks. The traditional financial sector in Bermuda has been unwilling to provide blockchain startups with banking services, referring to legal and regulatory barriers as justification for this, prompting Premier Burt to introduce these changes in support of economic growth.

Bermuda’s Minister of National Security, Wayne Caines believes that the industry needed well-rounded regulation before it could flourish. He maintained that the BMA had 20 companies in London waiting to do business, commenting that “it’s actually phenomenal”.

Caribbean governments and businesses are showing increasing interest in currencies like Bitcoin. In recent years, due to slow growth and high debt rates, major US banks have become more reticent about doing business in the region, frequently withdrawing capital from Caribbean markets. This has created a deficit of banking services inciting local banks to engage in illegal activities such as facilitating money laundering.

The sluggish economy and the tourist industry on which it mostly survives needs a boost, and Bitcoin is proposed by some as a way of energizing it. The Caribbean Tourism Organization plans to introduce cryptocurrency payments for tourist services and integrate Caribbean economies in the region through the use of virtual currencies.

“Tourism is the largest single contributor to the Caribbean economy. It is absolutely critical to every single Caribbean nation’s well-being and development. We see this as a very natural and necessary association,” said Rawdon Adams, CEO of blockchain payment startup Bitt.

The Bermuda Royal Gazette suggests that Uulala is targeting unbanked and underbanked Bermudans, and in doing so aims to provide far more financial inclusion in the banking sector. CEO Oscar Garcia has a $50 million target for its ICO, with $10 million already raised privately, although the firm had to wait four months for its operating licence. He commented:

“Bermuda is known as a financial hub and it is very forward thinking on blockchain and fintech… They have a reputation of being excellent regulatory stewards and we thought that would be a better fit for us than a jurisdiction where we could say we’re good, they’d believe us and give us approval in three weeks.”

In order to promote a blockchain friendly environment, the premier has also signed a memorandum of understanding (MoUs) with blockchain and industry players on the island in a push for creating related employment.

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Blockchain for Fair Distribution of Housing, Kenya’s Promise in the Aftermath of Large-scale Corruption

Turning to blockchain in attempts to fight corruption, Kenya has stated that it has faith in emerging technologies to tackle the issues of theft and misuse of public funds.

The Kenyan government’s new housing project, in which it has plans to publicly fund the building of 500,000 living units raises sceptical eyebrows amongst the population, with good reason.

The figures that illustrate the degree of corruption at governmental level make sorry reading, with public departments taking bribes at an alarming rate. A recent Ethics and Anti-Corruption Commission (EACC) report published this month, indicated that the numbers of those paying bribes to receive a range of government services have risen to 62% from 46% over a period of two years.

The recipients of bribes from the public include local elders with 17% of respondents to a recent survey saying that they have been forced to pay bribes to community heads. The police were high on the list at 16%, and other services and departments taking bribes included the Registrar of Persons, the County Health Department and the National Ministry of Land.

The new housing sector comes with its own set of problems though, and also a history of corruption following a National Youth Service scandal, in which 40 civil servants and 14 private sector officials were arrested for the theft of $78 million from the project’s funds. However, the Government is now planning to put a halt to the rising figures of corruption and misappropriation of funds lost to such projects by employing blockchain in its latest move.

The Kenyan Distributed Ledgers and Artificial Intelligence Task Force was established earlier this year to focus on blockchain and how the technology could be utilized to improve outcomes in the public sector. The group included local blockchain startups, experts, researchers and members of Kenyan regulatory bodies.

Speaking at a recent meeting on affordable housing with the World Bank in Nairobi, Housing and Urban Development Principal Secretary, Charles Hinga, said, “Kenya will use blockchain technology to ensure the rightful owners live in government-funded housing projects.”

The National Housing Fund under the Finance Act of 2018, to which Kenyans contribute 1.5 percent of their salary, will be responsible for the new blockchain-backed building project, with further financial support from employers.

In June, decentralized liquidity network Bancor, in partnership with the non-profit foundation, Grassroots Economics, launched a network of blockchain-based community currencies in Kenya aimed at combating poverty. The project seeks to stimulate local and regional commerce and peer-to-peer activity by enabling Kenyan communities to create and manage their own digital tokens.

Recently, Kenyan Distributed Ledgers and Artificial Intelligence task force chairman Bitange Ndemo said that the government should consider tokenizing the economy to deal with “increasing” rates of corruption and uncertainties.

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New US Trade Tariffs Will Hit China’s Mining Hardware Makers

New US trade tariffs aimed at China will have a significant impact on the profits of crypto mining equipment manufacturers.

Chinese cryptocurrency mining hardware maker Bitmain stands to be the hardest hit by these new tariffs as its Antminer S9 gets reclassified by the office of the United States Trade Representative as “electrical machinery apparatus” which will now incur a 2.6 percent trade tariff.

The reclassification of mining gear from their original status as “data processing machines” also brings crypto mining hardware into another goods category which will add a further tariff of 25 percent, bringing the new tariff total from zero to 27.6 percent overnight.

The new tariffs couldn’t be worse timed for China with mining gear giant Bitmain, along with two of the world largest manufactures of crypto mining equipment, Canaan and Ebang International, all filing to list on the Hong Kong Stock Exchange. Bitmain filed in September and is waiting to hear the outcome which could result in raising $3 billion. An executive at consultancy firm Quinlan & Associates explained:

“The marked decline in the price of bitcoin since the start of the year is likely to weigh on investors’ interest in these companies… [Yet] the fall in the price of bitcoin from its peaks has not been matched by an equivalent fall in the numbers of people mining it.”

Ben Gagnon co-founder of LuTech, a bitcoin mining hardware developer suggested that there had been increased activity in the mining sector over the past 18 months, but feels that the impact of the new tariffs will start to kick in:

“All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, in turn, be captured by the US trade tariff.”

Bitmain’s IPO prospectus claimed that overseas sales made up for 51 percent and 51.8 percent of its revenue in 2016 and 2017 respectively,  but neglected to stipulate exactly where the majority of these sales were concentrated. Canaan’s and Ebang International’s overseas sales represented 8.5 percent and 3.8 percent of their total revenue in 2017 respectively.

Bitmain has had little to say on the possible effect of President Trump’s trade tariffs, but Mark Li, the senior analyst at Sanford C. Bernstein, thinks that the company’s concerns that its technology is falling behind its competitors are likely to be their major focus.

A statement, prepared for Bitmain’s IPO, simply warned that changes in tax rates “due to economic and political conditions” may impact on the company’s financial status.

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McAfee Claims: If in 2020 Presidential Race, “I Will Tell the Truth”

British-American computer programmer and businessman John McAfee has begun making pledges in his run up to the 2020 US presidential elections.

The founder of McAfee Anti Virus software and vocal cryptocurrency advocate stated recently that he would seek a nomination to run in the next US presidential election. In doing so, has expressed a clear aim to advance the stature of cryptocurrency and blockchain on the world’s financial stage. McAfee recently suggested that blockchain and crypto have given new freedoms to the working community who he sees as ‘hired slaves,’ arguing:

“If you want to send Bitcoin, Ethereum or Monero, who do I have to ask? Only the peer… We are creating a permissionless society…We are not slaves for our jobs, we are not slaves to the government, we are slaves to the entire system.”

In his latest pledge as a potential POTUS runner, which would be his second attempt to get his name on the ballot, he has vowed to “tell the truth,” despite also explaining that he has no chance or indeed no intention of actually winning anything. He commented in his latest tweet:

“In truth: the crowd doesn’t want the truth. It is why politicians lie. They cannot win by telling the truth. I don’t want to win POTUS. I just want the stage.”

Running on “Truth” would be a campaign which would certainly get some support in the present political climate in the US. Although, it would be highly unlikely that McAfee, seen by some as a maverick would progress. The comparisons to the potential of Donald Trump to become US President, turning back the clock, are there to be made, however. When questioned back in June about his chances in 2020, McAfee said:

“Don’t think that I have a chance of winning. I do not. But what truly changes America is not the president, but the process of creating one. If my following is sufficient I get to stand the world’s largest stage and talk to everyone, as I did last time, to tell the truth.”

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Closing Charities’ Accountability Gap Through Blockchain Technology

Humanitarian Blockchain

a BitcoinNews.com series

   Part 3: Closing Charities’ Accountability Gap Through Blockchain Technology

          Welcome to the third installment of the Bitcoin News Humanitarian Blockchain Series. Charity begins at home, but the growing question being asked over the past few years is, where does it actually go?  We try to highlight some of the current solutions being presented by blockchain technology to this essential industry

The track record of the charity industry has been, regrettably, far from exemplary, and in some instances, at worst, disgraceful. Well-publicized scandals over the past few years have seen a decline in the public donations to charitable organizations, with some of those intuitions being brought into disrepute by misappropriation of public funds or inappropriate behavior of field staff.

Even now, a US investigation is looking into fraudulent identity activity in Myanmar where refugees fingerprints from amongst the Chin minority are causing confusion as fraudsters purchase refugees’ identities for their own ends. Also, in Bangladesh many Rohingya refugees in safe-harbor there have been registered multiple times and records of family groups have been almost non-existent,

Using Blockchain to clean up the industry is possibly the only way that many charitable institutions can survive, and regain public trust by demonstrating a greater level of transparency and accountability.

The main barriers to success in the humanitarian field have been lowering the impact of administration, transportation and documentation cost on donated funds, and making every aspect of donations totally transparent from source to final delivery of the benefit to the recipient.

Charities have been slow to take up the obvious benefits that can be offered to the industry. In fact, it is no exaggeration to suggest that there could be no more obvious and beneficial use case for DLT than its solution to the accountability problems that charities are currently suffering.

Luckily some organizations are on board, but far too few. The World Food Programme (WFP) has been quick to realise the potential of blockchain solutions. As Bitcoin News reported in the first of its humanitarian series, the uses in Jordan’s refugee camps has been essential, in not only feeding and providing work for Syrian refugees but also creating a renewed feeling of self-worth, particularly against female escapees from the war in Syria.

Former UN Secretary General Ban Ki-Moon, as far back as 2011, was trying to deal with how to get donated funds from a source. At the time, a massive $40 billion was failing to reach its intended recipients, the money was diverted to corrupt officials and middlemen. Seven years on, the blockchain is now being used by the WFP to tackle this problem. Gustav Stromfelt, one of the project managers working on the WFP’s program commented:

“We have this rapid ability to understand where our money is throughout the process…It improves transparency, accountability, and communication across the board.”

This UN-supported programme in Jordan uses dollars at this stage, not cryptocurrency, but through DLT every cent is accounted for right up to the purchase and delivery of physical goods.

Charities accepting cryptocurrencies, and there have been many, were badly hit by the drop in the value of Bitcoin at the end of 2017 and much of the funds were seriously diminished before funds could be dispersed. Silicon Valley Community Foundation revealed in its 2017 audit 45% of its investment assets were unable to be turned into cash in 2018 due to government restrictions.

Many of these problems are now being overcome through online mining schemes which benefit charities and straight crypto donations fund by such organisations as Children in Need and others.

Binance, the world’s largest cryptocurrency exchange by 24-hour trading volume, has recently tried to address some of these issues with the announcement of a Blockchain Charity Foundation which aims to plug the transparency gap for multiple organisations with its planned donation tracking system: Binance CEO Changpeng Zhao explains:

“Lack of transparency has been a problem for charities today. Some estimate up to 80% of donations does not reach the intended beneficiaries. With the ability to track every single transaction, blockchain technology seems tailor-made to solve this problem.”

Although the Blockchain Charity Foundation is still at concept stage, Binance suggest that the system will allow donors to give to one or as many chosen charities as they want whilst retaining anonymity if they wish: The company commented:

“Each BCF program will have its unique receiving address(es). BCF may choose to donate directly to the ultimate beneficiaries or work with other charity partners who then distributes the funds to the ultimate beneficiaries. Either way, the funds will be tracked in a transparent manner.”

Solutions to past problems are slowly being presented through new technology, but clearly, more urgency is required to reshape the face of the charity industry and restore public face so that charity can transit from home to its needy target and arrive at its destination intact, as was intended from the source.

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President of World Bank: DLT Has “Huge Potential” in Fighting Poverty

Jim Yong Kim, Korean president of the World Bank, has publicly come out in favor of blockchain technology as a tool for fighting poverty in a speech on the Indonesian Island of Bali.

Kim made the comments at the IMF and the World Bank Annual Meeting on October 11, suggesting that DLT had “huge potential” and as a result, the World Bank must keep abreast of emerging technologies.

The World Bank, part of the World Bank Group, is an international financial institution that provides loans to countries of the world for capital projects. It is comprised of two institutions: the International Bank for Reconstruction and Development, and the International Development Association.

At the forefront of all World Bank projects is the need to fight poverty, particularly in underdeveloped or developing nations. Kim referred to the need to combat corruption, often a barrier to successfully supporting developing nations, suggesting that this is a particular area where blockchain could make a significant impact. He commented:

“…we think distributed ledger has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.”

He went on to point out that the goal of the bank is to develop universal access to financial services by 2020 which he felt would be unlikely to occur without embracing available technologies and taking advantage of some of the “great things that are coming out,” referring to blockchain and AI.

As Bitcoin News reported recently, the World Bank and The Commonwealth Bank of Australia combined to create an Ethereum-based Australian dollar blockchain bond earlier this year. As for selecting both the CBA and Ethereum for the project, World Bank treasurer Arunma Oteh said that it had worked with the Australian bank for a year before it could launch the project. Ethereum was top of its list as it had “the largest and most active development community globally”.

Oteh continued on a positive note stating that the bank “will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient.”

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UAE Plans ICOs for Corporate Fundraising as Oil Price Slumps

The United Arab Emirates (UAE) is going ahead with its plans to use initial coin offerings (ICOs) for fundraising local startups in the new year to help boost financing in capital markets.

If successful, the UAE could become one of just a few countries in the world to implement a regulatory framework around ICOs and cryptocurrencies. To create this environment, the UAE has stated that domestic companies will be legally able to fundraise using ICOs next year, alongside traditional IPOs. To facilitate this, legislation will deem ICOs as securities in a draft to be enacted early in 2019.

Last year Abu Dhabi issued guidelines on cryptocurrencies and ICOs, regulating the latter as “securities”. Cryptocurrencies are considered commodities by the government of Abu Dhabi but are not legal tender. The move to introduce ICOs was confirmed by UAE securities market watchdog chief Omar Saif al-Zaabi who commented:

“The board of the Emirates Securities & Commodities Authority [ESCA] has approved considering ICOs as securities. As per our plan, we should have regulations on the ground in the first half of 2019.”

IPO performance has been significantly weakened over the past two years by a number of economic factors, including low oil prices and a weak equity market in the Gulf as a whole. In order to stem the tide, a new law is being brought into legislation which now will permit family-owned businesses to sell a majority of even 100% stakes in their companies with IPOs. Also, in a radical move for the region, it is suggested that there should be a mandated 20% of women on company boards, in the hope to attract more female investors.

The ESCA has sought help from overseas to implement their new plans and draft the new ICO regulations; its next task will be to develop crypto platforms to support the launches with support from both the Abu Dhabi and Dubai stock markets.

In other news from the Gulf, it was announced yesterday that Dubai residents will soon be able to pay for school fees, bills and some retail purchases using emCash, a state-developed blockchain crypto, which the government hopes will have wider applications in the future. A spokesperson for the state-backed subsidiary, emCredit, stated:

“To be the world’s first city to offer blockchain-based payment solutions to our residents is an exciting moment for Dubai… Deploying cutting-edge technology such as blockchain is a key priority and is delivering benefits to our citizens in the form of convenience and securities to customers and merchants across Dubai.”

The project was initiated by Dubai Department of Economic Development.

 

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VC Funding for Crypto and Blockchain Records 280% Annual Growth

Venture capital (VC) is fast becoming the new way to invest in blockchain companies outstripping ICOs, according to a new study.

VC investments generally come from hedge funds, private equity firms, or persons of extreme wealth, with the resources to invest funds into start-ups with the hopes of quality returns on the original investment.

The new study conducted by Diar, the weekly institutional publication on digital currency, assets, payments and regulation, suggests that the impetus has clearly shifted with VC companies now pouring their money into projects at a rising rate. VC research platform Pitchbook confirms that within the first nine months of 2018, USD 3.9 billion has been raised for VC blockchain enterprises, a 280% rise on the previous year.

The growing interest by venture capital companies in blockchain projects, juxtaposed against a diminishing number of ICOs, thought to be a result of government intervention and stricter rules being enforced on crypto startups who get their funding from ICOs.

The data also shows that the size of VC investments has gone up with the frequency, with median size of deals increasing over USD 1 million in this year alone, showing that as confidence in the industry grows, so does the preparedness to take a higher element of risk. The most active VC investor with 110 deals related to crypto and blockchain is Digital Currency Group (DCG), followed by Blockchain Capital and Pantera Capital with 100 deals.

On the heels of this latest news, Bitcoin News reported yesterday that South Korea’s largest VC company announced investments in TEMCO, a blockchain solution company for supply chain management built on the EOS network.

Korea Investment Partners (KIP) of Seoul has investments in over 50 companies, 20 private equity funds and a significant roster of partners all over the world. Its investment into TEMCO is of undisclosed value although according to a press release, it claims to be the first ICO funded by “major venture capital”.

In terms of where the new wave of venture capital is going to, reports suggest that the US, UK, and Switzerland top the list.

 

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