Category Archives: virtual currency

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ECB Chief Reiterates Lack of CBDC Justification

European Central Bank (ECB) president Mario Draghi has reconfirmed to the European Parliament that there are no plans to create a central bank digital currency (CBDC).

Draghi cited a lack of any prevailing economic conditions to warrant such as step, going on to suggest that DLTs hadn’t been severely tested as yet and still required “substantial further development before they could be used in a central bank context”.

The fact that discussions around the world about CBDCs is gaining some impetus hasn’t escaped the ECB or EU financial regulators, particularly in the light of Sweden’s Riksbank considering its own e-krona due to dwindling interest in cash and a rise in the use electronic money in that country.

The ECB, at one time scathing in its condemnation digital currency, has recently demonstrated a change of its stance, even suggesting that cryptocurrencies have a place in the future. It recently suggested that the financial body should begin to “…work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy”. The comments were made earlier this year by Bank of France Governor Francois Villeroy de Galhau who also sits on the ECB’s Governing Council.

Bitcoin’s rising popularity currently feeds the debate globally whether the future direction of money is electronic rather than paper. The ECB chief has suggested however that an ECB digital currency would mean that the central bank would set itself against the banking sector in such a scenario and lead to potentially substantial operational costs and risks.

A view held by some experts is that a CBDC could make quantitative easing more effective bypassing the banking sector, also as a substitute for bank deposits, strengthen the transmission of monetary policy changes to the economy. Such views assert that a CBDC need not be nearly as disruptive as the ECB maintain in its criticism of the concept.

 

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Bitcoin Eases Cross-Border Transactions for Palestinians in Gaza

Bitcoin is currently serving an important role in Gaza to help investors gain access to markets abroad and send money overseas.

Currently, Palestinians are unable to get their Israeli shekels or other currencies used in the area, such US dollars or Jordanian dinars, to online exchanges as they don’t work with local banks. This has given rise to many unofficial exchanges around the city.

The territories of Gaza and the West Bank are separated from each other by Israeli territory. Both fell under the jurisdiction of the Palestinian Authority but Gaza has since June 2007 been governed by Hamas, a Palestinian Islamic organization which came to power in free elections in 2006. It has been placed under an Israeli and US-led international economic and political boycott from that time onwards.

There are reportedly now 20 unaccredited exchanges helping local cryptocurrency users to get their money abroad to make investments that otherwise they would have no chance of making in the region. In Gaza, Mohammed runs his own unofficial crypto exchange and suggests that over the course of four years, he’s enabled up to 50 Palestinian families to buy an average of USD 500 worth of Bitcoin a month to use abroad or shop online. He maintains that his clients view Bitcoin as “cheaper, safer, and quicker”, maintaining that “nothing works with Palestinian banks” and that “Bitcoin wallets are alternative banks”.

Palestinians have adopted peer-to-peer payments are seen as another way of getting around local restrictions. Palestinians are under enormous pressure in Gaza and, due to Israel’s world status, international pressure often means that those sending money from the West have been known to have their accounts closed.

Laith Kassis, CEO of Techno Park on the West Bank, illustrated the problem for many wishing to get money overseas: “There is no payment gateway, like PayPal, for entrepreneurs to receive payments internationally… So here come solutions on blockchain with private nodes.”

The lack of power is another local issue that Palestinians struggle with as frequent outages equates to no access to the internet, making any kind of transfer of funds next to impossible.

However, Bitcoin enthusiast and professor of economics at the Lebanese American University, Saifdean Ammous doesn’t see Bitcoin or crypto in general as a solution to the failing Palestinian economy. He argues:

“If the people who want to do the transaction don’t both have balances in Bitcoin then you’re just adding extra layers of conversion from their home currency to Bitcoin and back to the home currency… That’s never going to be a sustainable solution.”

The World Bank estimates that 20% of Palestinians live below the poverty line of less than USD 5.50 a day. In this volatile highly-controlled environment, cash is the most highly sought-after payment for day-to-day necessities.

 

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Indian Exchanges Continue to Flout Crypto Banking Ban

The Reserve Bank of India (RBI) banking ban on cryptocurrencies in India is having less impact than the government anticipated as more exchanges go back to work.

Three exchanges have announced the return of Indian rupee (INR) deposits, contrary to the government ruling in July, which effectively removed INR deposits and made withdrawals illegal. Petitions against the current ruling are up for Supreme Court scrutiny later next week. On 12 September, Koinex announced rupee deposits and withdrawals were now back in operation at their exchange, referring, rather romantically, to the “old times”:

“We are happy to announce the revival of INR in the crypto universe through a new peer-to-peer deposit and withdrawal mechanism for INR transactions… Just like the old times, users will be able to deposit and withdraw funds directly from their INR wallets.”

Another exchange, Coindelta, is back to business as usual too with an equally folksy announcement on their website:

“We have resumed back the INR deposits and withdrawals on Coindelta. Not only this, your old favorite INR markets are back where you can trade with your INR.”

Two other platforms, Koindesk and Giottus, are back too, the latter with a peer-to-peer (P2P) system, allowing its users to withdraw rupees. P2P has become a way that many exchanges have developed for their own homemade way of operating. Exchanges now using a P2P system for accessing and spending their rupees include WazirX, Intashift, and Coind.

WazirX head Nischal Shetty suggested that the exchange was seeing more that one match per minute through its P2P facility, with trading increasing daily, proving that crypto is very much alive and well on the subcontinent.

Rahul Chitale of Instashift said: “Since the last set of RBI-related developments in the past couple of months, we have continued to see strong 20-25% growth in trading volumes month on month over the last 2 quarters of our operation.”

In the meantime, Dabba growths in strength, profiting from the RBI ban. Working via the messaging app Telegram, with money as cash routed through the various channels in the hawala system. The money then passes either officially or unofficially to the foreign account where Bitcoins are transacted. Payment is then made in cash or check and the deal is done: no exchange, no Indian bank.

 

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Oregon Pushes Ahead with “Blockchain State” Plan

With many states in the US beginning to push various blockchain projects through state legislature, Oregon state in the country’s Northwest has also made a claim to the “blockchain state” handle.

The Oregon Blockchain Venture Studio in Portland has been set up to further this aim, with a number of companies and organizations from the fields of education, business, and technology linking their know-how to push the new tech in the state.

The aim is to specifically target 20 to 30 companies in the state over three years, hosted by digital agency R/GA, while forming a partnership with two state universities, Intel and sports giant Nike. The Venture Studio will also benefit from a USD 250,000 commitment through Business Oregon and the Oregon Growth Board.

The main idea of a studio is to give local companies opportunities similar to those that venture capital might offer. Jeff Gaus of Oregon Blockchain Venture Partners suggests that the “Oregon ethos exactly maps to what is required for blockchain to work”, adding that the state could become “what Pittsburgh is to steel or Detroit is to autos or Seattle to manned flight”.

Selected investors in the studio will contribute USD 3 million a year, each receiving investment capital of USD 100,000. Potential investment dollars will also be available from studio partners.

Although other US states are pushing their own blockchain plans to elevate their profile around the nation, Business Oregon spokesman Nathan Buehler claims that no state has really staked its claim as yet. He feels that Oregon is well placed through its established hardware and software industry to “establish an advantage” over other states.

Governor Dannel Malloy of Connecticut has recently signed off on a law in that state that will employ a blockchain working group, in order to further study the technology and how it can be utilized in state legislation. It is reported that the governor’s intentions are to make Connecticut “a leader in blockchain technology”.

It appears as though the United States is undergoing radical changes at institutional and governmental levels; in late July, blockchain technology in public sector projects also received a guidebook from a US-based IT industry trade association called CompTIA.

 

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Coinbase Goes on Wall Street Hiring Spree as Part of Global Expansion

Coinbase has cut the ribbon for its new New York office with plans to expand the staff profile to 150 employees over the next 12 months.

As part of the company’s expansion plans, the current staff of 20 have been acquired from the New York Stock Exchange, Barclays, and Citigroup, which indicates the level of seriousness on its part in infiltrating the banking system. Adam White, general manager of Coinbase Institutional, explained the staffing direction the exchange was embarking on:

“We have to create a bridge between financial services and technology,” he added, “In order to do that, we need to pull from some of the best and brightest minds that have worked their whole careers in other kinds of traditional financial firms.”

With an expansion into the Irish Republic and now NYC, crypto exchange giant Coinbase is clearly on a push to amplify its influence around the globe. In its push to raise its corporate and institutional investor client base, the office is following the NYSE with its new staffing profile. According to Christine Sandler, the company’s head of institutional sales, its focus on institutional investors should sit comfortably with its retail investment trade. She commented:

“We want to partner with appropriate institutions to help the whole ecosystem grow.” She further said, “It’s not ‘institutional or retail,’ because a lot of these institutions will be distributors.”

White argues that they had expected an exodus of institutional investors when the market corrected but claims, “It was exactly the opposite.” White sees Coinbase as having the capability to “light up more countries and more fiat rails” with a new office in Tokyo planned and a move into South America. White further said: “we’re committed to not being a U.S. company.”

Coinbase has also joined a new Washington-based lobby group called the Blockchain Association who intend to convince governmental bodies to give the crypto space some well-needed regulatory leeway in a bid to foster innovation.

Along with Coinbase other leaders in the sector include Circle, Protocol Labs, and other crypto investment firms, like Polychain Capital and Digital Currency Group,

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TV Drama Features Crypto, Still the Elephant in the Room?

Another TV staple added some extra exposure to cryptocurrency. Britain’s longest running TV drama Coronation Street, added a scenario fitting a recent script.

The soap, Coronation Street, is one of the world’s oldest show running on British TV since 1960 and has a run of 9,500 episodes since its creation. The show is watched nightly by over 8 million viewers in the UK and many more around Europe.

The plots, always set in a working-class neighborhood in Manchester, deal with the daily struggles of loves and lives of those living in one street. The current plot in question focused on a local Ryan Conner, an ex-drug user with a serious gambling problem. He remembers a £50 investment he once made in a cryptocurrency called “Whipcoin” (fictional), only to discover that his investment is now worth £250 million.

Of course, he’s forgotten his password, but eventually, upon locating the coins, he finds that the information he was given about the coin was wrong. Although, his investment in Whipcoin had indeed been worth £250 million when the price of the coin peaked. It had since then plummetted in value to practically zero.

Channels such as Bitcoin News continue to bring the latest in cryptocurrency to the public, but the sector still needs greater mainstream media exposures. Although, this is happening slowly with exposure on popular mainstream television such as The Simpsons, The Big Bang Theory, House of Cards, Supernatural, The Good Wife, Silicon Valley, Family Guy, and Parks and Recreation.

The Big Screen is slow to integrate scripts with Bitcoin or cryptocurrency as a theme, but there are a few in the pipeline such as “Crypto,” starring Kurt Russell in the lead role. The film, already in post-production, is reportedly a crime-based thriller following in the footsteps of films such as Wall Street, Wolf of Wall Street and The Big Short which focussed on the economic crisis of 2008.

Such films about the financial sector are becoming increasingly popular and tend to get good box office ratings as a result. Martin Scorsese’s The Wolf of Wall Street quickly became the prolific filmmaker’s top-grossing film at the worldwide box office shortly after its release.

Publisher Little Brown is to release a biography about crypto twins Cameron and Tyler Winklevoss called “Bitcoin Billionaires”. The book, which is to be published both in the UK and US next year, has been bought by Richard Beswick, Little Brown’s publishing director.

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Poll Reveals Millennial’s Rush to Crypto Still Male Dominated

The latest cryptocurrency poll has indicated that millennial women are still lagging behind in adoption of cryptocurrency.

A new survey conducted in the US with 3000 millennials, was published on September 12, 2018, by crypto finance company Circle. It revealed that currently, men invest in cryptocurrency at twice the rate of women within the millennial age bracket.

In terms of investment, 71 percent of millennials say that they have kept their investment in crypto below $1000, of which 42 percent invested under $500 and 29 percent invested between $500–$1,000. The bigger spenders or at least those investing more than $1000 represented 29 percent of the poll. 17 percent of men are planning to purchase crypto against 8 percent of women.

The gender gap which has always existed in terms of crypto investments appears not to have narrowed greatly in the US if the results of this survey give a fair indication of who’s investing between the sexes. In the UK, which has become a major crypto hub, particularly for millennials, things have improved significantly over the past year according to a recent London Blockchange poll.

Their poll conducted earlier this year showed that the number of women showing interest in investing in cryptocurrencies has gone from 6 percent to 13 percent over the last six months; almost twice the amount revealed in the US poll. A significant result of that survey revealed that women were far less likely to stress over cryptocurrency, keeping a cool head when making their crypto investments. This inference was drawn from the new Circle poll which suggested that 42 percent of millennial men were “aggressive investors” as opposed to 27 percent of women.

The figures from the Blockchange poll suggested that women in the millennials group are responsible for the increased percentage of women participants in the space, as millennials remain the dominant group worldwide in cryptocurrency investment. Another survey revealed that this group viewed Bitcoin as more trustworthy than big banks.

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It’s 2-0 as Brazilian and French Football Teams Go Crypto

With an increase in football teams and individual players taking up crypto-related products, two more clubs have picked up this current trend.

Two teams, Brazilian Avaí Futebol and top French club Paris Saint-Germain have both recently announced their own crypto token sales.

Avai Futebol Clube, currently languishing in Brazils Series B second tier, has announced plans for a USD 20 million ICO to develop a fanbase digital ecosystem in order to gain promotion to the higher Series A division. With promotion, the club would then be able to compete in the prestigious Copa Libertadores and make much-needed infrastructure modifications.

The club plans to work with SportyCo and Blackbridge Sports to sell 20.46 million tokens at USD 1 each and retain another 7% of the issue. Avaí president Francisco José Battistotti suggests that the ICO is part of a real push to get promotion and spread the club’s fanbase to a wider audience:

“With our ICO, we are actively… engaging all Avaí FC in Florianópolis and Brazil, working together towards our goal – to become a stable member of Brazil’s Série A and qualify for the Copa Libertadores… paving the way for other clubs all over the world to approach financing their sporting activities in this novel way.”

The club has set a minimum target of USD 8 million with its eyes set on a USD 20 million fundraising round, although the management suggests that funds will be returned to investors should it not make the lower figure.

The announcement follows French football giants Paris Saint-Germain’s own statement earlier this week that it was planning to form a partnership with Malta-based blockchain company Socios.com to issue its own cryptocurrency. PSG have become the most famous club in French history having won a total of 38 trophies at the top level, including the EUFA Cup.

The Fan Token Offering (FTO) will allow fans with PSG tokens to vote on “cosmetic” club issues, such as awarding player prizes, choosing friendlies and choosing strip colours.

 

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Crypto Gains Valuable Voice in Washington with New Lobby Group

A new lobby group has been formed in Washington DC with the express purpose of representing crypto entrepreneurs and investors.

The group, the Blockchain Association, helps to put some further impetus behind the industry in the way it is represented to legislators and lawmakers in the nation’s capital.

Comprised of leaders in the sector, currently made up from  Circle, Coinbase, Protocol Labs and other crypto investment firms, like Polychain Capital and Digital Currency Group, the new lobby group has become the first of its kind, specifically aimed at improving conditions within the cryptocurrency space in the US.

Based in Washington, the group intends to assist crypto and blockchain companies through the law as it relates to the industry, and work with legislators on issues such as tax-law, KYC and AML policy. For industry players, many will be encouraged that the industry now has a voice in the capital, particularly those who welcome prudent voices in the push for regulation.

Detractors of cryptocurrency’s growing corporatization and privatization, however, won’t be convinced even if Coinbase’s chief legal and risk officer Mike Lempres, assured that they weren’t “looking to game the system”.

Recently, Coinbase established its own political action committee (PAC) for the crypto industry, becoming the first of its kind to do so. The role of PACs in the US is that of a fundraiser for candidates running for public office. At the US federal level, an organization becomes a PAC when it receives or spends more than USD 1,000 for the purpose of influencing a federal election and registers with the Federal Election Commission, according to the Federal Election Campaign Act.

Coin Center’s executive director Jerry Brito agreed with Lempres, claiming that it gives their company another outlet for responding to difficult issues:

“We’re happy to see this organization stand up. It’s good to have more voices advocating for things we agree about. But probably more importantly for us, a lot of folks project ‘trade association’ onto Coin Center, and we’re decidedly not that. When we get questions about the industry, we can send them to these folks.”

 

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US Defence Department Facility to Become Crypto Mining Data Center

A Nevada-based cryptocurrency investment company is planning to convert a US Department of Defense facility into crypto mining data center.

The company, Wuhan General Group (China) Inc, has seized the opportunity to use the redundant facility, originally called the Defense Department Data Center, for its mining project which will eventually be able to tap into a power supply able to support a total of 1,300 mining rigs.

Amid stiff competition around the world, companies are finding it increasingly difficult to find locations suitable for Bitcoin mining. The US has seen a flurry of activity this year with numerous outmoded plants being readapted for crypto mining.

Many aluminum sites around the country have been readapted towards utilization for mining. Alcoa World Alumina and Chemicals (AWAC), with customers in China, the United States, Europe and Brazil, have notably seen some of their old operational US sites for aluminum processing go.

Bitmain has been creating mining supersites, mining farms on a scale never seen before. Other major cryptocurrency mining firms like Coinmint are also building similar sites. Ramy Kamaneh, Wuhan General Group’s CEO, maintains that it was just a matter of time before the company seized the opportunity to become another overseas company to mine in the US:

“We had planned to build this operation three months ago, but with the bearish cryptocurrency market, we took a step back to reassess our strategy. The decision to wait for market stability was a good one, especially considering many cryptocurrency machines are no longer profitable in the current market.”

Once negotiations have been completed, the first 1,300 rigs will be installed in October, followed by the potential to add 12,000 more rigs in 2019. The initial installation according to the company should create a monthly revenue of USD 3.5 million.

The challenge for industrial-scale crypto mining in the US as the sector moves forwards is to develop more sustainable methods of operating, such as utilizing more hydroelectricity. A good example of how this can be both profitable and ecologically sound is DPW Holdings new Installation at Valatie Falls, New York, and geothermal plants in Iceland.

 

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