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Cryptocurrencies – The Future of Money?

India scraps its 500 and 1000 fiat currency notes to combat corruption. England bans the 500 Euro note in concerns of terrorism funding and drug trafficking. Sweden, one of the first countries to experiment fiat currency might be one of the first ones to remove it altogether. These headlines raise a significant question, where does the future of money lie once fiat currencies are out of the picture?   Putting a ban on large fiat currencies, although well intended, reduce the economic freedom of the mass population. Interest rate provided by banks reduce drastically,  in fact in some cases going into negative. Inflation rates have also seen an upsurge thereby fluctuating the value of liquid assets. 

As an alternative, the first thing that comes to the mind of many is the digital currency industry. Reports such as Barclays introducing cryptocurrency desks make it evident that there is wider adoption of digital currencies. The question is, to what extent in the long run will cryptocurrencies replace money. 

A large number of financial firms and investors have sought trading in cryptocurrency. A Reuters survey found out that one in every five firms are looking to trade in altcoin in the next year. 70% of them said that they would do so in the next three to six months. There has been a large flow of money from venture capital firms to startups in relation to blockchain technology and cryptocurrency. In the three months after January this year, the amount invested in blockchain businesses is far more than the USD 55 million average for the three year period. 

Cryptocurrencies hold the potential to change the face of finance

One of the biggest positives is to see firms’ open mindedness on regulations of cryptocurrencies. In fact, as long as they’re reasonable, regulations might even persuade investors who have currently been on the sidelines due to their skeptic nature. Moreover, a bullish sentiment was expressed in the group of 20 nations’ (G20) meeting when finance ministers made a joint request to FSB to consider multilateral response around cryptocurrencies. 

Perks of a complete transition to cryptocurrencies

There are many advantages to an all cryptocurrency future, such as the fact that cryptocurrencies cannot be easily manipulated, therefore giving a stability assurance to an individual. Fiat currencies involve intermediary cut during a typical everyday transaction, something that cryptocurrencies will eliminate. However in an all crypto scenario, the infrastructure will have to be well-developed. Cryptocurrencies are also a better medium of distributing universal basic income. This makes it interesting to see whether financial institutions would pivot to this status quo in time or just stick to the traditional fiat mode of currency. 

Cryptocurrency usage in an essence reduces the requisite to trust other actors in a system, thanks to the fact that it is a peer to peer encrypted mode of transaction that is decentralized and secure. 

Concerns pertaining to the transition to cryptocurrencies

Needless to say, a complete crypto takeover also poses many challenges. Firstly, the fact that in certain countries the infrastructure to facilitate a digital currency system is a major obstacle. Secondly, the transition process from cash to cryptocurrency creates a void in compatibility for certain people, leading to an inevitable loss of assets since the traditional currency would lose its value without any recourse. 

The government has a hold over its citizens via its ability to print fiat notes. This is primarily due to the fact that it has a centralized control over money that circulates around. With the introduction of cryptocurrencies, the government loses this influence, giving the citizens more freedom in what they buy and what they save. In addition, this also removes the government’s option to print more currencies in case of a financial turmoil, which would then become dependent on the cryptocurrency mined. 

However, there are also some ways in which it will be in the interest of the government for an all crypto world. Identification and attesting of citizens will be an easier venture to accomplish. Analysis of financial stability of an individual will also be an easier job to do. In the third world countries, identification of refugees and migrants will be an easier job which will help them get micro loans or will allow them to make purchases in case they are forced to leave the country. 

How would an all crypto world look like?

In the event that crypto completely takes over fiat currency, the distribution of wealth will be facilitated as opposed to its concentration. Cryptocurrency would help in better distribution of wealth due to its decentralized network. The increase in the number of users in an integrated technology network proportionally increases the capital investment in such a network leading to a serendipitous chain of events. Therefore introduction of cryptocurrency in developing countries will be beneficial for the upliftment of the entire system. 

The very consequence of a crypto world will make investors look towards the acquisition of digitized assets such as user data on the internet or credit system for online payment.  

A report from the second quarter of The Federal Reserve Central Bank of St. Louis stated that,

In the near future, a close cash substitute will be developed that will rapidly drive out cash as a means of payment. A contender is Bitcoin or some other cryptocurrency. While cryptocurrencies still have many drawbacks… these issues could rapidly disappear with the emergence of large-scale off-chain payment networks (e.g., Bitcoin’s lightning networks) and other scaling solutions.

Conclusion 

BitcoinNews.com has already shed light on how 65% of the world’s central banks are dipping into blockchain, the underlying technology of cryptocurrencies. Moreover, several countries such as Venezuela, The Marshall Islands, Senegal and Tunisia have either already released government-backed cryptocurrencies or have it in the pipeline. This has proven to decrease dependency on fiat currencies while preventing counterfeits.  

Regardless of an individual’s perspective of a complete crypto transition, the future is unknown. On one hand many speculate that a crypto takeover is inevitable, while on the other, many believe that a crypto dominated economy is a dream too far fetched. Although there have been tendencies in the economical world which suggest our transition toward a crypto led economy, the traditional skeptical mindset of the people will serve to be a big obstacle to tackle. But one thing is for sure, an all crypto society has the potential to change the way people save and sell. 

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Barclays Chases $5.5 Million for Blockchain Invoice Exchange

Barclays Chases .5 Million for Blockchain Invoice Exchange

Barclays, the bank that has been skirting cryptocurrency for some time now since its announcement last year of a new ventures unit to study “disruptive technology”, has led a USD 5.5 million funding round for fintech firm Crowdz’s blockchain-based global invoice exchange.

Clearly, the bank has no desire to be left out in the cold, and its partnership with technology investment firm Bold Capital Partners shows its blockchain intentions, this time dumping manual operations by digitizing and automatizing its invoice processing procedures.

Barclays UK Ventures continues its push to “develop new customer propositions around major areas of disruptive technology”. Blockchain has never been far from Barclay’s development plans and the bank has become an active promoter in the fintech sphere since last year. CEO of Crowdz, Payson E Johnston, is keen to promote the speed and efficiency that blockchain can bring, particularly to small and midsize enterprises (SMEs):

“Today, small and midsize businesses often have to wait for a financially crushing 90 to 120 days or more to get paid. It’s no wonder that more than half of them suffer cash-flow problems during any given year. However, with the Crowdz Invoice Exchange, these, often struggling, companies can get paid within a few days or less-at rates usually far less than available elsewhere in the market.”

Earlier this year Barclays took part in trialing DLT to enhance the speed and efficiency of real estate transactions with the Instant Property Network using Corda’s blockchain-focused software consortium developed R3. However, Barclays appears to be playing catchup as four other major banks, Commerzbank, ING, Natixis, and Rabobank have already have adapted blockchain technology by finding a solution to minimize operational costs and risks using Corda’s R3.

 

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VC Tim Draper Eyeballs Facebook Coin Project as Possible Investment

facebook coin

Tim Draper, Draper Associates venture capitalist and crypto pundit, is reported to be meeting with Facebook in order to determine if his company should invest in Facebook Coin – a stablecoin project being considered by the social media giant.

The idea behind Facebook Coin is to allow FB users to conduct transactions using a cryptocurrency pegged to the US dollar in tandem with WhatsApp.

Draper is certainly not shy when it comes to investments, and knows a good deal when he sees one, having invested in Telsa. Inc, Hotmail, and Skype before discovering Bitcoin in 2014 into which he invested USD 89.1 million. Since then he has become an outspoken advocate of the flagship cryptocurrency, talking up its price at every opportunity.

It’s thought that Facebook needs USD 1 Billion in venture capital to get its plans for the stablecoin project moving. The company taking more than a passing interest in the crypto space over past months hired PayPal president David Marcus to head its blockchain team. A cryptocurrency could be a massive boon to the company’s already well-heeled status claims Barclays’ analyst Ross Sandler:

“Any attempt to build out revenue streams outside of advertising, especially those that don’t abuse user privacy are likely to be well-received by Facebook’s shareholders.”

Sandler sees a potential USD 19 billion being added to Facebook’s annual revenue. Draper’s role in such a project could be quite influential given his track record, and his predictions for Bitcoin, in particular, show great faith in the future of cryptocurrencies as a concept.

Draper who’s been consistent in his prediction that Bitcoin prices would hit USD 250,000 by 2022 has views on crypto’s future that would give Facebook, with all its engineering prowess, great heart. Talking of Bitcoin’s future, Draper maintains that crypto as a vital part of the financial system will become a reality, becoming bigger than the internet.

“My reasoning is that all these engineers have to create all the things they are doing to make it really easy for us to spend it and to use it and to move it and to build it into our contracts and all of that.” He adds, “This affects the entire world and it’s going to be affected in a faster and more prevalent way than you ever imagined.”

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Microsoft’s Bing Browser Reveals 5 Million Crypto Ads Count in 2018

Microsoft’s browser Bing has revealed that it blocked over 5 million cryptocurrency-related ads during 2018 after its announcement last year that it was to start banning such advertising on its network.

The numbers were announced in Microsoft’s “Ad quality year in review 2018” published on 25 March, citing cryptocurrency as a “prime target for fraudsters and scam artists to defraud end-users”, despite the proven millions of legitimate users of cryptocurrency around the globe. The company’s official stance was clarified in an official post:

“Because cryptocurrency and related products are not regulated, we have found them to present a possible elevated risk to our users with the potential for bad actors to participate in predatory behaviors, or otherwise scam consumers.”

It appears that despite the bans on crypto related advertising announced in tandem by the likes of major social media sites and companies such as Facebook and Google in January and March of last year, both Twitter CEO Jack Dorsey and Facebook’s Mark Zuckerberg appear to have a conflicting stance on cryptocurrencies, with rumors afoot that Facebook is looking at developing its own cryptocurrency.

The as yet unconfirmed move by Facebook to develop a cryptocurrency for global payments has been cited by multinational banking group Barclays as a USD 19 billion opportunity for the social networking giant. The company’s WhatsApp-driven crypto global payments system reported by The New York Times has still received no comments from Facebook but Barclays is already speculating on where this move, if it happens, could take the company’s profits by 2021.

Dorsey recently revealed his fascination for Bitcoin after studying its “beautiful” white paper. He iterated that Bitcoin and blockchain is the future of world economics and will bring in a new technological revolution.

 

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Facebook Crypto Could Pull $19 Billion Additional Revenue

Facebook Crypto Could Pull  Billion Additional Revenue

The as yet unconfirmed move by Facebook to develop a cryptocurrency for global payments has been cited by multinational banking group Barclays as a USD 19 billion opportunity for the social networking giant.

The company’s WhatsApp-driven crypto global payments system reported by The New York Times has still received no comments from Facebook but Barclays is already speculating on where this move, if it happens, could take the company’s profits by 2021.

Barclay’s internet analyst on Wall Street, Ross Sandler, has been happy to project figures on to what is still an unconfirmed report, also suggesting base-case of an incremental USD 3 billion in revenue from a successful cryptocurrency implementation if the crypto P2P system tied to fiat currencies goes ahead, adding:

“Merely establishing this revenue stream starts to change the story for Facebook shares in our view… Any attempt to build out revenue streams outside of advertising, especially those that don’t abuse user privacy are likely to be well-received by Facebook’s shareholders.”

Due to the huge user base of Facebook, numbering over 1 billion, a Facebook cryptocurrency would become extremely popular and has the potential to become one of the top cryptocurrencies quickly. The first hints that Facebook may be considering a move on cryptocurrency emerged last year when the company created a blockchain research team led by David Marcus, with a goal of leveraging blockchain technology, and possibly cryptocurrency, across its social network platform. Sandler predicts:

“Based on our checks, the first version of Facebook Coin may be a single purpose coin for micro-payments and domestic p2p money transfer (in-country), very similar to the original credits from 2010 and Venmo today.”

 

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It’s On, Off, On again: Is Barclays Ringing the Changes with a Crypto Trading Desk?

It's On, Off, On again: Is Barclays Ringing the Changes with a Crypto Trading Desk?

With Barclays investing in the preliminary assessment of a cryptocurrency trading desk, the British multinational investment bank has shown that it hasn’t quite shrugged off the lure of crypto trading.

The bank has been skirting cryptocurrency for some time now. In April 2018, it entered the blockchain arena, with Barclays UK announcing a new ventures unit to study “disruptive technology”.

This was driven by Barclays UK Ventures unit with an aim to “develop new customer propositions around major areas of disruptive technology”.  A month later, rumors began to emerge that that Barclays was monitoring client responses to the possibility of opening a trading desk for cryptocurrencies, although the bank suggested it was simply monitoring the space.

Months later, the former head of trading at Barclays was given a new position as Head of Digital Assets Project: Barclays Investment Bank, while the director of oil options trading at the bank, Matthieu Jobbe Duval became Digital Assets Trading – Consultant at Barclays. This prompted investors to expect a statement, which never came.

Blockchain has never been far from Barclay’s development plans and the bank has become an active promoter in the fintech sphere, recently hosting the Blockchain Interoperability Hackathon at the Barclays Rise fintech hub in London.

Clearly this latest assessment by the bank shows that they still have one eye on the space and the needs of its customers; needs which have also been expressed by JPMorgan clients recently. Rumors also abound that Goldman Sachs is considering hiring for a cryptocurrency trading team.

Like its counterparts across the pond, Barclays still appear to be very much in the game.

 

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Starting Young: UK High School Wins 3rd Place in Barclays Blockchain Comp

Starting Young: UK High School Wins 3rd Place in Barclays Blockchain Comp

Blockchain enthusiasts are starting young, as proved by the third-placed team at a blockchain interoperability hackathon at the Barclays Rise fintech hub in London. The hackathon was hosted by London-based blockchain startup Clearmatics.

The prize was awarded to a team of high school students from Bedford, who was up against challenging senior competition.

Not only did the students take away the third prize; their entry wasn’t planned ahead, with only two days to organize their project, according to Dr David Wild, head of computer science at Bedford School. His team knew almost nothing about blockchain tech just 48 hours prior to the contest.

Dr Wild guided his students through the process of designing a smart contract to share exam results between schools, exam boards, and university admissions by using the Ion framework. The teacher explained that the students’ lack of prior knowledge actually worked in their favor: “If you are writing a piece of software say, you want somebody who is naive to use it because they tend to use it in the ways that you wouldn’t imagine.”

The team of high school students who had not even sat their A-Level exams yet was pitted against blockchain experts from Santander and Barclays and other UK bank representations, as well as seasoned startups such as Web3j and Adhara.

One of the students commented on collecting their prize that it was truly a last-minute learning curve, pointing out: “We learned quite a lot about Solidity and smart contracts on the train.”

 

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Russian Gazprombank to Launch Crypto Trading Service

Russian Gazprombank to Launch Crypto Trading Service

State-owned Russian bank Gazprombank is making good on suggestions it made earlier in the year that it was hoping to provide cryptocurrency assets to its clients in the future.

Back in March, Gazprombank’s Swiss division declared that demand from clients asking for facilitation and management of cryptocurrency funds meant that this next move was definitely on its radar and consequently a July pilot was put in motion.

The Russian government is still reviewing cryptocurrency regulation under the Digital Assets Regulation Bill, filed 25 January. The bill defines cryptocurrencies and tokens as digital financial assets. If the bill passes in its current form, it would allow trading on cryptocurrency exchange operators with authorized Know-Your-Customer (KYC) standards. This would also apply to initial coin offerings (ICOs) established in Russia. The Russian Duma will also lay out specifications for interacting with crypto and blockchain-related technologies.

The bank has decided to forge ahead with 2019 as its latest target, snapping up partners Avaloq and Metaco on the way, using SILO, a product developed by blockchain technology company Metaco. Metaco has integrated SILO into one of Avaloq’s Banking Suite product. An older, more established company, Avaloq supplies “core banking” products to some major financial institutions, including HSBC, Barclays and the Royal Bank of Scotland.

Avaloq’s Group Chief Technology Officer Thomas Beck claims that Metco’s integration of DLT will give crypto traders an extra layer of security:

“Thanks to the close integration of the Metaco storage solution, banking and wealth management customers won’t have to trust additional third parties when trading with cryptocurrencies. By bringing together all asset classes in one portfolio view, the solution will also ensure the highest levels of convenience and usability.”

In a joint statement released by the companies involved, they’ve stated that the bank will be able to “buy, sell and transfer crypto assets and currencies on behalf of clients and provide a consolidated portfolio view, without any need for a crypto-wallet or private key management”.

In other breaking crypto news from the region, the Russian Intellectual Property (IP) court has successfully used a blockchain-based solution for storing copyright data, with the court using blockchain solution provider IPChain‘s system to record a change in rights holder data of an IP, thus saving the data on the decentralized ledger permanently.

The IP recording platform is already working for the government of Uzbekistan, helping it record copyright data, especially in science and innovative sectors. Uzbekistan has also penned a deal with Kyrgyzstan’s State Patent Office, helping them digitize and store records in a decentralized environment.

 

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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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UK Bank Barclays Could Be Tapping into Crypto

It has been reported that UK bank Barclays has been looking into the possibility of opening a trading desk.

Three months is a long time in cryptocurrency circles. Bitcoin News ran a story in May suggesting that the bank had no such plans and would continue to monitor clients. Barclays spokesman Andrew Smith in an emailed statement in April commented:

“We constantly monitor developments in the digital currency space and will continue to have a dialogue with our clients on their needs and intentions in this market.”

Cryptocurrencies presented a “real challenge” earlier in the year for Barclays CEO Jes Stately who was said to have suggested at a shareholder’s questions session:

“…on the one hand, there is the innovative side of it and wanting to stay in the forefront of technology’s improvement in finance… On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”

Barclays may still not want to have a part in these “activities” but there is activity happening at the bank, according to reports. The former head of trading at Barclays has a new position, now entitled ‘Head of Digital Assets Project: Barclays Investment Bank’, while the director of oil options trading at the bank, Matthieu Jobbe Duval, is now ‘Digital Assets trading – Consultant at Barclays’.

The implications are clear if these titles represent anything, and illustrates that Barclays has moved on since the May statements. Duval suggests that Barclays:

“Hired him to produce a business plan for integrating a digital assets trading desk into [the bank’s] markets business revenue opportunity, competitive landscape, budgeting and planning for delivery, IT buildout, capital and balance sheet impact.”

Business Insider, who ran the original story, said that a bank representative denied that any such project existed and crypto trading was not planned.

Other major banks Goldman Sachs and JPMorgan Chase have admitted to some cryptocurrency interest, with Goldman soon to open a desk after client pressure and JP Morgan at least building a team with boss Jamie Dimon almost conciliatory after scathing crypto comments last year.

 

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