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Argentinian Bank Utilizes Bitcoin for International Payments

Banco Masventas, a bank based in Argentina, has launched a new service as of 22 May 2018 which will utilize Bitcoin to facilitate international money transfers. This is a major milestone for Bitcoin, since it is likely the first time it has been used by a financial institution as an international payments standard.

The bank is partnering with Bitex, a Latin America-based Bitcoin exchange, to facilitate the international payments. In an interview with Coindesk, Bitex chief marketing officer Manuel Beaudroit said that customers won’t actually be touching any Bitcoin when using this new international payment service offered by Banco Masventas. The customer simply asks the bank to send an international payment from their account, and the bank in coordination with Bitex will handle converting their fiat funds to Bitcoin and back again when it reaches its international destination.

This service offered through Bitex will allow Banco Masventas customers to significantly reduce costs associated with international transfers since there will be no international banks as intermediaries. Also, international transfers will be faster than other systems, occurring in less than 24 hours. It only takes 10 minutes for a Bitcoin transaction to confirm on average, but it will take some time to convert fiat to Bitcoin and back to fiat.

International transfers will be available to over 50 countries, and Banco Masventas will be charging a 3% commission.

Of course, Bitex’s process of converting fiat to Bitcoin and back to fiat when the money reaches its international destination is inherently centralized and possibly not entirely cryptographically secure. Customers will have to trust Banco Masventas and Bitex when using this new international transfer service.

Sending Bitcoin by itself with no other service involved actually makes more sense if control of your money and security is the priority. Of course, using purely Bitcoin is less convenient since ultimately it usually needs to be converted into fiat before it can be used to buy goods and services. Bitex streamlines the process of converting Bitcoin payments to fiat, which can be quite an arduous process if someone had to do it themselves. Also, using the service offered through Bitex removes the risk of market volatility.

It is a big deal that any bank is using Bitcoin to transfer money across international borders, and this may be the beginning of banks recognizing and utilizing Bitcoin as a trustworthy payment method in the future. Bitcoin’s ability to transfer money anywhere in the world instantly and securely is gaining recognition.

 

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Aussie Govt Considers Blockchain for Services, Welfare Payments

Australia’s Prime Minister Malcolm Turnbull has asked the country’s Digital Transformation Agency (DTA) to research blockchain, and how it could be used to improve government services, including welfare payments.

The Australian government has granted the agency a budget of AUD 700,000 (USD 530,000) in order to carry out an investigation into DLT, according to ITNews.

“The Prime Minister, in fact, wrote to our minister and asked us to have a look at blockchain, which evolved into this particular piece of work,” DTA chief digital officer Peter Alexander said.

The move is not entirely surprising given recent interest among financial instructions in the country, most significantly, the Australian Securities Exchange’s (ASX) recent plans to replace its current clearing and settlement system with a DLT model within the next two years.

“ASIC (the Australian Securities and Investments Commission) [was] looking at blockchain, immigration – now home affairs – was looking at blockchain and considering it, and more agencies were talking about it,” Alexander said, adding, “Lots of vendors were coming to government and talking about blockchain.”

The move is one of many focused on how the government can best leverage blockchain’s advantages, including another DTA announcement this week that the agency plans to look into how the technology can be used for making social security welfare payments to citizens.

The new plan is focused on payments by Centrelink, reports CCN. The DTA feels that there are significant advantages of delivering social security welfare to citizens over a blockchain. Centrelink, part of the Department of Health Services (DHS), is responsible for a range of payments, particularly those relating to unemployment, pensions, and health. DTA Chief executive Randall Brugeaud stated:

“Our plan is to look for use cases across the Commonwealth with an initial focus on the welfare payment delivery system, then working with our digital service standard, we’ll conduct user research a view of having a prototype by the end of the next financial years.”

Brugeaud added that the potential of blockchain to securely record transactions would be investigated, drawing on the experience of other public and private sector organizations.

As blockchain is increasingly being developed and employed in new sectors across the country, cryptocurrency is also increasing in popularity. While Australia may not be the largest market for Bitcoin and other digital currencies, it is one that is quickly growing. It is currently ranked the 13th in the world for Bitcoin trading volume.

 

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Kidnappers Demand Bitcoin Ransom for South African Boy

A 13-year old boy named Katlego Marite was abducted by kidnappers in eMalahleni, formerly Witbank, South Africa. A note with a Bitcoin (BTC) address was left at the scene specifying that a ransom of BTC 15 should be paid if the parents wanted to see their kid again.

As of this writing, the ransom is worth USD123,000. It appears to be the first known case in South Africa’s history where criminals demanded a ransom to be paid with cryptocurrency.

According to reports, the boy was playing with two friends on Frangipani Street when a gold Toyota Corolla pulled up. A man dressed in black with a green jacket grabbed the boy and drove off, and the boy’s friends ran home and told their mother who called the police.

It is unclear why the boy was specifically targeted. The parents were not even aware of Bitcoin or how to use it, so this kidnapping did not appear to target a stash of Bitcoin.

Bitcoin can provide a degree of anonymity when sending money, which is speculated to be the reason the kidnappers chose the currency. All they had to do was leave their Bitcoin address behind with no other identifying information. This is unlike Western Union, MoneyGram, or banks where identifying information is required to accept payments.

Realistically, Bitcoin and cryptocurrency, in general, are the only private payment methods that can be used to transact from a distance. Except for its physical nature, cash is technically more anonymous than banks and payment providers like Western Union, since a normal cash transaction requires no identifying information.

 

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Bitcoin Pizza Day Marks Eight

Eight years ago today, on 22 May 2010, Laszlo Hanyecz of Jacksonville Florida made history by purchasing two large pizzas from Papa Johns with 10,000 Bitcoins. This was considered a major milestone as it was possibly the first time that Bitcoin was used to purchase goods from a major company. Today, ‘Bitcoin pizza day’ is proof that Bitcoin could be used as a currency.

Hanyecz had mined the Bitcoins to purchase the pizza on his personal computer. This is a feat that is now impossible, mining Bitcoins on a personal computer costs more in electricity than the minuscule amount of Bitcoin it produces. Nowadays, expensive specialized mining rigs made with application specific integrated circuits (ASICs) are required to have any chance of mining Bitcoin profitably.

The pizza was purchased with the help of a forum user on Bitcointalk; Laslo Hanyecz sent the Bitcoins to the forum user and then the forum user purchased the pizza with their card. Bitcointalk continues to be the most popular Bitcoin and cryptocurrency forum to this day, and was started by Satoshi Nakamoto, the mysterious founder of Bitcoin who disappeared shortly after it launched.

Many would think that Laszlo Hanyecz would have regrets over using 10,000 Bitcoins to buy a couple of pizzas, since today they are worth an astonishing USD 84 million. Coindesk released a pizza day tracker which updates in real-time how much the 10,000 Bitcoins used to buy the pizza are now worth, expected to result in cringing and astonishment from most.

He doesn’t appear to have any, however, he was stoked just to be able to use the Bitcoins to buy pizza since he had gotten them for free by mining on his computer and they were barely worth anything at the time.

At the time the infamous pizzas were purchased, each Bitcoin was worth roughly 3/10 of a US penny. This fact help illustrates how enormous the rise in Bitcoin’s price has been. As of this writing, each bitcoin is worth USD 8,200, an incredible rise of 273,300,000% since pizza day. There is probably no other asset in the world that has risen at such a pace as Bitcoin has in the long term.

Now Bitcoin can be used to buy anything in the world and is accepted on at least a thousand different retail websites, but it all began with one man in Florida using Bitcoin to buy pizza.

 

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Blockchain Gains US Momentum as Ohio Examines New Bill

The US state of Ohio is currently proposing a change to state law through a bill which will legally recognize smart contracts and storage of records on a blockchain, according to Coindesk.

There are several states in the US that have adopted blockchain-associated laws. Vermont, Arizona, Delaware, Illinois, Nevada, and Tennessee are among these states. Indiana, Iowa, and Texas have taken a somewhat negative approach against cryptocurrencies or flagged them as potentially risky.

Some states have examined the governmental use of blockchain, either as isolated applications in specific or integrated government functions. Vermont, for example, recognizes data stored on a blockchain as admissible in the court system, according to Brookings.

Washington and New Hampshire have succeeded in passing some legislation and Arizona has introduced or passed regulations ranging from making signatures, transactions, and contracts on a blockchain legally valid, to allowing residents to pay their income tax in cryptocurrencies.

If Ohio becomes another blockchain state and the ‘Revise Electronic Transactions Act/blockchain/smart contracts’ bill signs into law, it will significantly pass ownership rights to those needing to store electronic information on the blockchain. Bill 300 states:

“Notwithstanding any other law, a person that, in or affecting interstate or foreign commerce, uses blockchain technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to that information as before the person secured the information using blockchain technology.”

Changes to the existing bill have notable inclusions in the amendment relating specifically to blockchain, making it clear that smart contracts will legally usable for legal documents.

Brookings research shows that in the past two years, a wave of states has started to shift attention to blockchain technology and explore the potential roles of the technology in public and private services.

Recently, Arizona passed a bill that allows residents of the state to use cryptocurrencies in making tax payments. Also, Wyoming passed its own bill through both legislatures early this year which exempts cryptocurrency from state property tax, potentially making it the friendliest state in the US to investors of crypto assets.

 

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Walmart Develops Sales Platform Integrating Blockchain

Walmart has filed an application with the US Patent and Trademark Office for a sales platform which integrates blockchain technology. This platform was invented by Donald R High, Michael D Atchley, and Chandrashekar Natarajan.

This is a big milestone for the use of blockchain technology, considering that Walmart is one of the world’s largest company with USD 500 billion of revenue, 11,700 stores in 28 countries, and 2.3 million employees. Any integration of blockchain technology by Walmart will end up being used by millions of people worldwide.

In the patent application, a platform for re-selling Walmart products is described. When a customer purchases a product it is recorded in the blockchain with the exact time and cost. The customer can sell their product on the platform to someone else and reference the blockchain record as proof of authenticity. The blockchain will continue to track the product as it passes through the courier service to the end customer, providing another layer of security that the product will be delivered as promised.

Essentially, the blockchain will provide an immutable record of a product’s history from when it is first purchased at Walmart. This record will be virtually safe from hacking or modification since it is secured with cryptographic technology, making it very reliable and giving purchasers of re-sold products peace of mind.

The blockchain records are expected to help prevent fraud when re-selling Walmart products, saving people money. Theoretically, this blockchain technology can be used to track down products stolen from Walmart as well, if the serial numbers are recorded in the database when the products are put on the shelf. In this way, any stolen product can be referenced back to the blockchain database as long as it still has its serial number.

The provisional patent application was originally filed on 16 November 2016, while the non-provisional application was filed on 16 November 2017 but published to the public only five days ago. The patent application has yet to be examined or approved; it takes on average two years from the non-provisional application date for a patent to be approved or disposed of.

If Walmart’s blockchain technology patent is approved, it will have retroactive protection from the provisional filing date in 2016 and can sue anyone who copied the technology since that date. There is no guarantee that the patent will be approved, it must go through patent prosecution to determine if it is unique enough to warrant a patent.

Regardless of whether the patent succeeds, Walmart can begin to use the sales platform with integrated blockchain technology described in the patent at any time it chooses.

 

Image source: https://www.flickr.com/photos/jeepersmedia/14872355556 – Mike Mozart

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Seoul Mayor Doubles down on Blockchain Pledges Ahead of Local Elections

Ahead of the Seoul mayoral elections in June, the present mayor of the South Korean capital Park Won-Soon has made manifesto pledges to increase blockchain developments, among other high-tech industries.

A progressive power

Park has been mayor since 2011 and is now aiming to secure a third term. In the past, he has put forth encouraging proposals for urban redevelopment under his aspirational ‘smart city’ plans which have been in motion as early as 2014.

As reported by local news outlet The Korean Herald, Park had highlighted “six strategic sectors that the city hopes to expand, including the Internet of Things, AI, big data, and bio-health, while creating more jobs in less affluent neighborhoods to promote ‘balanced regional development’”.

CoinDesk Korea also reported that he is doubling down on his commitment by furthering efforts to create a center for blockchain incubation in the city district of Mapo. His words will undoubtedly chime well with the swathes of millennials in South Korea who are investing in cryptocurrencies and are soon to be part of a “cashless society” pilot project conducted by the Bank of Korea.

Park’s blockchain commitment, which was announced on 20 May, is a pledge to turn the Mapo Fintech Lab into a dedicated hub for blockchain and fintech development. It is the first proposal in history from the Seoul Metropolitan Government to back blockchain technology.

South Korea appears to be moving past its skeptical views of initial coin offerings (ICOs) and cryptocurrencies at an accelerating pace. Fresh regulatory stances, taxation laws and the push to legalize ICOs have put South Korea at center stage of blockchain advancements, and Park’s propositions are putting him at the epicenter of further industry attention.

In early April, Bitcoin News reported that the mayor had announced plans to further implement blockchain technology in the capital city, citing economic benefits, savings on utilities and providing new work opportunities for the young and unemployed populace of Seoul.

S-Coin and beyond

The mayor has also put forth even bolder plans to introduce a cryptocurrency for the city. Park is working towards creating appropriate institutional frameworks for Seoul to have its own digital currency, ‘S-Coin’, which will be used in city-funded social benefits programs.

With it, he is keen to address the scrutinous views presently held by the South Korean government. Park suggests that with evidence of success, further developments will follow soon after.

In an interview with CoinDesk Korea, Park said, “As Seoul is the world’s leading city in the field of information and communications, including the Fourth Industrial Revolution, I think we should study new technologies such as blockchains.”

The news has received international attention and should the mayor attain his third term, Seoul could become the blockchain capital of the world, challenging highly favorable crypto-friendly nations like Switzerland.

 

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Crypto CEOs Are Making Moscow Home

Moscow has the highest percentage of CEOs or founders of ICO-seeking projects working from the Russian capital, claims international technology investment company Atomico.

In figures acquired in 2017, Atomico cited Russia at the top of a list of major crypto-active locations around the globe, followed by Silicon Valley, New York, and London. No Asian capitals appeared in the statistics which were posted on news website Quartz earlier this week.

Quartz writer John Detrixhe claims that Russia’s programmers leave a significant footprint in the world of cryptocurrency, particularly in ICO markets. He suggests that Russian accents are always a feature of ICO pitch competitions, although when it comes to actually raising funds, the US, Singapore, Switzerland, and the UK top the charts. Germany, the UK, and France each have more professional developers than Russia, according to Atomico. The Netherlands has many more developers on a per-capita basis.

Tech professionals, according to Detrixhe, are quick to point out that Russia is rich in programming skills and cryptography, a legacy of the old Soviet Union’s focus on science. The USSR still ranks second, behind China, in International Mathematical Olympiad wins, even though it sent its last team in 1991.

Crypto innovation is coming out of Russia because it has some of the best intellectual capital in the world, said Oliver Hughes, chairman of Tinkoff Bank, a digital lender based in Moscow. Even Sberbank, Russia’s biggest bank, behaves like a fintech firm, according to him. Sberbank reportedly has more than 11,000 developers, which is more than all the employees at Snap, Square, and Twitter combined.

After the breakup of the Soviet Union, a plethora of scientists became available and startups were an ideal home for some of these, and those with any knowledge of digital systems were ideally placed in the newly computerized Russia.

Russians today have become cryptocurrency savvy, and even Vladimir Putin is being advised to break new ground and embrace a technology which could indeed prove be a useful panacea to the ongoing US and European sanctions.

Quartz claims that there are concerns in Russia that Moscow is trying to influence the blockchain and cryptography standards in a way that allows the state to undermine it. Putin met with Ethereum creator Vitalik Buterin last year, and since then the Russian government has started to take the possibility of a central bank digital currency a little more seriously, despite a crackdown on private sector use.

If cryptocurrency is adopted in Russia by the central bank, it remains to be seen if it simply becomes a feature of overseas trade, utilized for sanction busting by the Kremlin, or made available to all. If it’s the latter, clearly, if these statistics are correct, Moscow has the technical capacity and know-how to make its domestic crypto space a success.

 

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Japan’s Largest Bank Partners with US Tech Giant for Blockchain Payment Service

The biggest bank in Japan has partnered with a US tech company to design a blockchain capable of handling 1 million transactions per second, boosting speed and reducing transaction feeds through distributed ledger technology.

MUFG and Akamai partnership

The Mitsubishi UFJ Financial Group (MUFG) partnered with US-based Akamai to deliver a new global payment network service, which is intended to be available from 2019 and will be compatible with Internet of Things (IoT) style payments and other emerging technologies.

“MUFG and Akamai, using Akamai’s globally deployed high-speed and high-security platform, will utilize this new blockchain’s high-speed processing and secure value transfer abilities to promote pay-per-use, micropayments, and other new IoT generation payment methods, and to support the diverse payment options of the sharing economy by offering an open platform,” reads the 21 May press release.

The new blockchain developed contrasts with the original cryptocurrency Bitcoin, which was built on the first blockchain in the world and can only process seven transactions per second; the distributed ledger developed by MUFG and Akamai is “permissioned”, which means that verified computers are the only ones able to join the network.

Risk and reward

MUFG and Akamai detailed the growing interest in blockchain technologies and highlighted its capacity to “strengthen protection against falsification of transactions and drastically lower costs”, as well as the fact that financial institutions across the globe are partnering with tech companies to also test proof of concept designs.

While the technology is reported to “create new risks for banks”, the Japanese financial giant has embraced it with Akamai, which according to the press release is “the world’s largest and most trusted cloud delivery platform”.

Blockchain has been receiving surging amounts of interest from governments and institutions since ICOs and cryptocurrency markets exploded in 2017. Industry heavyweights such as IBM, Amazon, Microsoft, and JPMorgan are making bold steps toward adopting the disruptive technology, which will only contribute to the future successes of the blockchain industry.

Blockchain, banking, and a cryptocurrency

Earlier in May, the Japanese financial giant reported that it had intentions of trialing its own cryptocurrency in 2019, which lines up perfectly with the intended release date for the new blockchain service.

As reported by Japanese local news outlet NHK, the fifth largest bank in the world by assets will be rolling out a trial app to approximately 100,000 MUFG account holders who can install the app on their smartphones and convert their deposits into the MUFG coin; one MUFG coin will be worth one Japanese yen. Users will also be able to use the currency wherever they so please and transfer the currency to accounts of other participants.

It is a clear indication that the global stance on blockchain and cryptocurrency technologies is shifting toward the mainstream. Should the partnership and digital currency trial be successful, it will prove a transformative moment for the industry, financial institutions and society.

 

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Spain Opens Legal Doors for Funds Investing in Crypto

Spain’s Comisión Nacional del Mercado de Valores (CNMV) or National Securities Market Commission, recently stated that investment funds could interact with Bitcoin.

The statement was within a Q&A document for fintech companies, with one of the questions asking if a fund registered by CNMV could directly invest in cryptocurrencies. The answer by the CNMV was:

“This type of funds would have a legal place in Law 22/2014, which regulates, in addition to venture capital entities, other collective investment entities of closed type and their management entities.”

Law 22/2014 funds for Spain fall into three categories: closed-end collective investment entities (EICC), closed-end investment funds (FICC), and closed-end investment companies (SICC).

All three funds must have their own conditions and requirements in order for a fund to be classified as such and, therefore, to be able to invest in cryptocurrency. And while the CMNV has made it legally possible for funds to delve into digital currencies, the possibility is only on paper. Separate issues regarding regulations and valuation of volatile assets like Bitcoin and Ethereum still exist. CMNV later states:

“The investment of FICC and SICC in cryptocurrencies raises a series of practical problems on how to comply with the regulations regarding the valuation of assets, the management of liquidity and the custody guarantee.”

The last condition eager funds should know is that this possibility may not be permanent. CMNV is only issuing this ruling until there is a European or international standard. So even if a fund satisfies all the right conditions, all of its hard work may be for naught at a moment’s notice.

Regardless, this is a massive step forward for cryptocurrencies being seen as legitimate assets in institutional trading.

Most regulated funds handling cryptocurrency do it indirectly, either through a price index, derivatives, or other market products. Few hold actual Bitcoin, Ethereum, or any other digital currency.

And while having regulated funds hold something reminiscent of a cryptocurrency, the positive implications for cryptocurrencies market and brand image are more pronounced when they’re holding the real thing.

 

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