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Coinshares CSO Expresses Opinion on Rapidly Evolving CBDCs as Central Bank Tools

Coinshares CSO Expresses Opinion on CBDCs

  • Coinshares CSO Meltem Demirors believes that CBDCs are evolving rapidly with an increase in the number of countries adopting the same.

Just as China is almost ready to launch the digital Yuan, CSO of Coinshares, a financial service firm based in London, Meltem Demirors expressed her views on Central Bank Digital Currency (CBDC) and how the entire landscape surrounding digital currencies has changed, of late. Meltem Demirors, also an active participant of the World Economic Forum Blockchain Council, spoke about the growth of cryptocurrencies, ICOs and stablecoins in her weekly podcast.

At present, several countries have joined the CBDC race, while many others are still contemplating this digital form of fiat currencies. Demirors is of the opinion that in actuality, the way CBDCs are managed, may not be very different from that of fiat currencies. As she mentioned in the podcast, the government stated how it would utilize all the available resources to make CBDCs a success, however, this holds good for how fiat currencies are deployed as well.

Demirors also stated that CBDCs provide a way for central banks to reinforce their policies and tackle monetary issues while challenging the status quo of the traditional banking system. However, people should not confuse between CBDCs and Bitcoin as both of them are completely different entities.

As reported earlier, Canada, Japan, Sweden, Switzerland and the United Kingdom came together with the EU to conduct research on the potential use cases of CBDCs in their own jurisdictions.

 

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Ukraine Plans to Officially Legalize Bitcoin and Other Cryptocurrencies

Ukraine Eyes Legalization of Cryptocurrencies

Ukraine Plans to Officially Legalize Bitcoin and Other Cryptocurrencies

In what could be considered as a historic decision, the ministry of digital transformation of Ukraine plans to legalize the possession and usage of cryptocurrency. Although cryptocurrencies are not banned in the country, they do not have any official status as of now. As a part of Ukraine’s step towards modernization under its newly elected young president, Volodymyr Zelensky, the ministry announced that one of it main aims would be to legalize the usage of cryptocurrency. Moreover, they plan on integrating blockchain technology in their registry system.

Alexander Bornyakov, one of the deputy ministers emphasized upon the need for Ukrainian people to come out of the ‘gray area’. Furthermore, he spoke about how Ukraine would want to capitalize on cryptocurrency miners. Ukraine hopes to earn off of these cryptocurrency traders and miners. He went on to speak about their plans on applying the blockchain technology on public registries and documentation based on DLT (Distributed ledger technology).

With Ukraine getting a newly elected president, its step towards modernization and digitization has gotten stronger. As previously reported on BitcoinNews.com, Ukraine’s ministry launched a state policy to legalize crypto. Ukraine’s new president aims at speeding up the process tremendously. This makes Ukraine a place where blockchain usage and its evolution is in prevalence, making it a hub for blockchain innovation.

Ukraine’s minister of digital transformation spoke about how he wanted government services to become as efficient as Uber and Airbnb. For this, he required complex technological systems which the Ukrainian government could obtain via blockchain.

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Helping More People in More Innovative Ways: UNICEF Explores Crypto

UNICEF explores blockchain to revolutionize its ventures.

In the aid sector, innovation is making waves. One example is how the United Nations Children’s Fund (UNICEF), mainly created to safeguard children’s rights, is exploring the innovative gateway of blockchain to pioneer cutting-edge ideas and transform the way assistance can be extended to the deprived areas of the world.

Amid the rising hype of Bitcoin, blockchain too has caught the eyes of many, thanks to its wide range of use-cases. Several market players have built business models based on blockchain to elevate the respective industries, be it healthcare or fashion. And thanks to pioneers like UNICEF, the technology is being leveraged far beyond industrial use-cases.

Blockchain in UNICEF immunization

According to a report published by WHO, immunization saves as many as 2-3 million lives every year. UNICEF’s immunization programs are aimed to support the countries in extending the service to deprived children. In doing so, UNICEF has partnered with several NGOs and startups throughout the world.

The issue at hand is that about 19.4 million children under the age of one year do not receive basic vaccines yet. The problem traces back to the lack of administrative data which inhibits the healthcare workers from reaching out to the underprivileged children.

To encourage immunization, UNICEF initiated the #VaccinesWork global campaign during World Immunization Week 2019. The Bill & Melinda Gates Foundation (BMGF) supported the effort through its donations. Moreover, the foundation, through the 22nd round of the Global Grand Challenges Explorations, funded eight startups. Recipients were recognized for their work in devising innovative models to acquire high-quality and timely data required to enhance immunization coverage. The eight teams will work with the business and technology mentors and UNICEF’s experts to develop models with scalable strategies which can be implemented in 2020, which will mark the last year of the Global Vaccine Action Plan.

David Sarley, Senior Program Officer at the Gates Foundation, said:

“The Grand Challenges Explorations mechanism has been a tremendous engine for identifying and testing innovative ideas. As we look to new approaches to improve immunization coverage and equity, we wanted to see whether additional sprint support from UNICEF could improve the likelihood that our GCE innovations can successfully go to scale.”

More recently, UNICEF, along with the Gates Foundation, assisted five of the aforementioned companies (Gram Vaani’s SnapVaxx, Har Zindagi, Macro-Eyes, Ona, Tupaia) in an initiative called Innovation Sprint Support. The companies participating in the program will spend the coming year developing solutions by combining business and technical aspects to meet UNICEF’s standards and demonstrate sustainability.

According to Forbes, the special innovation team is now exploring ways to transform their model both internally and in the field, using blockchain technology. It uses a blockchain-based platform called Bounties Network to track mentorship between mentors and startups in an efficient and transparent manner. The platform allows real-time tracking of the startups to learn about their operations and track the exchange of value.

UNICEF has also opened up job opportunities for blockchain developers to exploit the benefits of the technology.

We’re Looking for a full-stack #blockchain developer to join our growing team – building prototypes and supporting @UNICEF in the exploration of the technology.

APPLY today: https://t.co/aKh301PMbv pic.twitter.com/j9ZqYLFws8

— UNICEF Innovation (@UNICEFinnovate) July 26, 2019

Reforming influence through bounties

Earlier this year, UNICEF France joined hands with UNICEF Ventures and Bounties Network to study blockchain bounty prototypes. With a goal to incentivize the creation of digital public goods, UNICEF designed a digital token dubbed Boost token on the Ethereum blockchain. UNICEF took to ETHDenver, the largest gathering of the Ethereum blockchain community, to test the token and engage the community with it, from naming the token to finding a logo for it. Boost tokens were also offered to the individuals who were contributing to the cause on the lines of good deeds and selflessness. The valuation of the bounty rewards were based on the complexity of the tasks performed.

Sneak peek into the future

UNICEF and the Bounties Network are exploring bounties at a broader aspect to resolve tasks which can turn much more challenging over time. In a report, it stated that collaborations with partners to find solutions to complex problems, especially with rewards such as Boost tokens, will help involve more people and boost efficiency. Essentially, it will also help in bridging the gap between the NGO sector and the crypto space. Through these ventures, UNICEF is establishing a pivotal point for organizations to connect with the crypto and blockchain world and enhance their enterprise.

Over the next five years, UNICEF will venture to dumb down supply chain complexities to boost immunization process planning, implementation of the program and vaccination coverage, to offer a dynamic approach to monitoring and performance assessment.

Blockchain to make donations to UNICEF

UNICEF has been a strong advocate of cryptocurrencies in the past. Its inclination towards cryptocurrencies was clearly illustrated when it added nine popular digital currencies to its website donation portal last year, only to walk into 2019 by appending DAI crypto to the list.

In May 2019, UNICEF educated young individuals about the potential of blockchain at the SURGE event hosted at ETHCapeTown. The participants who had no prior knowledge about the technology, by the end of the day were found glued to their computers to further understand its diverse applications and transformational potential.

Brianna MacNeil, RightMesh, said: “After a full day of learning, it was clear that they understood how blockchain technology could play a transformative role in their lives. One of the most amazing moments was the demonstration of how blockchain can enable two people from separate countries to be able to transact directly with one another in seconds.”

The students also described how the traditional system requires them to pay SAR 5-10 (USD 0.35-0.70 USD) for every single action with their bank account, even if it was just to view their account balance. This is a striking divergence from a few cents required to send an Ethereum transaction through the network. This example established a strong reminder of the revolutionizing role technology has played in the financial world while shedding light on future roles.

Last year, UNICEF invested USD 100,000 into six blockchain companies and 20 other startups to leverage technology for the development of transformative solutions to social problems and help bridge the UN Sustainable Development Goals funding gap in innovative ways. Previously, UNICEF also pondered on the potential of blockchain to improve schools in Kyrgyzstan and enhance implementation of Project Connect in the country.

Ibrahim Mahgoub, UNICEF Ventures Technical Support Advisor told Forbes,

Everyone knows how quickly startups grow, and how technology can be used to transform a business. We believe children deserve that same scope of transformation.”

 

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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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Blockchain Career Opportunities Are Booming

Blockchain Career Opportunities Are Booming

The blockchain and cryptocurrency industry has seen a steep rise in expansion over the last few years, grabbing the attention of various users across the globe. With many companies investing billions in blockchain technology, career opportunities have been increasing by leaps and bounds.

According to a report by Tech Jury, the blockchain market is expected to surge to USD 20 billion by 2024. Several companies and banks are leveraging blockchain for the potential it holds to revolutionize business and real-world applications.

It is estimated that in ten years, about 80% of the population will be engaged with blockchain in some form. In fact, as reported by BitcoinNews.com earlier, engineers left their highly paid “dream jobs” to pursue a career in the blockchain industry thanks to its decentralized ideology. 

The popularity of cryptocurrencies has gained ground among enthusiasts, venture capitalists and major corporations. Amid the curiosity surrounding the crypto space, the underlying technology of crypto has led to a boom in the financial market. It has been estimated that investment banks and companies can save an estimated USD 12 billion by using blockchain tech to cut down on the radical costs for data transfer and storage.

Insight on career opportunities

In August 2018, according to a Glass Door economic research report, blockchain career listings saw a whopping 300% increase over a span of one year with 1,775 job openings in the United States alone. The median blockchain-based job salary was found to be about USD 85,000, about 61.8% more than the average US median salary, with New York being the top US metro for job openings. LinkedIn produces over 3,000 job results in the US alone for blockchain-related work ads.

Graph indicating the involvement of people in the crypto and blockchain industry
Image source – Indeed

Blockchain-based careers have become a lucrative option for tech-savvy personnel. The most popular line of blockchain job, according to Glass Door research, was found to be Software Engineer and about 45% of blockchain-related jobs are for software engineers. Needless to say, apt coding skills are an essential qualification for this job. These engineers develop the software apps, infrastructure for Bitcoin and Ethereum use, which serves as the basic premise for the working of blockchain technology.

Next, are the blockchain web designers, who perform marketing activities and build the interface and design blockchain websites. They have to ensure that information about the digital currency industry is correctly and minimalistically presented. Next in demand is the role for Operations which requires a skill-set of operation management and IT. There has also been an increase in demand for the financial personnel considering the fact that the industries are deeply-rooted with finance.

Perhaps an important aspect in which blockchain-based jobs facilitate employment is through the recruitment of non-technology jobs. The increase in technology-related jobs and the general expansion of a blockchain company gives rise to the need of non-tech jobs such as risk manager, marketing manager, public relations officer, product manager, among others.

Oracle, one of the largest technological companies globally, has been expanding its blockchain team, while Chinese industrial and commercial banks have recorded sales of USD 165 billion. This expansion gives rise to the need for real-world experts who keep a check on the security and accountability of the transactions that take place. Even last year, according to a LinkedIn report, blockchain developers took the topmost position in terms of hot demands. Blockchain, therefore, has the potential to serve as a career opportunity for talented candidates, along with them receiving handsome salaries. 

Companies like Circle, Fourkites, and Pixelplex are making long-term investments in blockchain by hiring candidates and many other companies are encouraging skilled personnel by providing them job opportunities to excel in blockchain career. For example, ITExpertsIndya has created its one-size-fits-all job application wherein anyone who is interested can fill up a their name, phone number and other details and submit their resume in a click. They are looking for highly-motivated, organized individuals who give attention to detail and who are results-oriented. It is required for the job applicant to have knowledge of requirement analysis, functional design, software design, database design and testing.

The consultancy companies putting out the most job postings for crypto and blockchain roles are Deloitte, IBM and KPMG. It is highly anticipated that Facebook is going to join this list with the ongoing related hiring spree of the company.

Facebook’s crypto team expansion

It is no secret that Facebook is entering the crypto space with the plan of launching its own crypto dubbed Libra. The project will be open to about 12 countries and is planned to debut in the first quarter of 2020. The company has been attracting a large audience with the support of major payment gateways including Visa, Mastercard and Paypal. Backed by a consortium of 100 corporate investors, Facebook has stirred a storm in the job market. A lot of aspirants have their bag full of hopes to grab the job opportunities in the dream company. 

There is an increased pressure on Facebook to protect user safety and privacy given its involvement in data breach scandals in the past. Needless to say, the management of such a wide database is no piece of cake. This will only open gateways to the expansion of the crypto team. Therefore, with the success of the Libra project, there will be a direct increase in the career opportunities such as compliance, legal, regulatory, privacy and audit jobs to contain the venture.

At the time of writing, Facebook has listed 38 new job opportunities in the blockchain industry which includes Business Development Manager,  Lead International Blockchain Counsel, Financial Accountant, Data Scientist, Growth Product Manager, Threat Investigator, Quantitative UX Researcher, Mixed Methods UX Researcher, Head of Data Science, Director in Payments Partnerships, Vice President, Technical Sourcer and Head of Customer Services.

As reported recently, a prominent professor from MIT was recruited by the social media giant to work on the crypto project. The increase in hiring by blockchain firms shows the long-term interests that firms have in mind. Monetary investment may be volatile in the short run, but investment in human resources sends a strong message of the long term trends.

Blockchain can have a rapid growth in the near future if the employers and the companies promise to believe in the potential of this technology and put in all their efforts and skill in blockchain technology. The primary requisite of the blockchain-related jobs is that it revolves around good coding skills and engineering experience.

Fortunately, these openings are centered in places where there is no shortage of technical and financial expertise. Blockchain is a dynamic and fast moving industry and these trends have created a large scope for people to have developed trust in it, paving the way for long-term interests.

 

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FATF to Enforce Time Restriction on Exchanges’ Customer Information

FATF To Enforce Time Restriction on Exchanges' Customer Information

The Financial Action Task Force (FATF), who met last week for another round of talks to decide on new AML steps, is to bring in a time restriction for crypto exchanges on data sharing.

The FATF has set a time limit of 12 months during which time exchanges must share user and sender information with “beneficiary institutions”.

The new data sharing guidelines, which are not actually set in law as yet, have further angered those in the industry who already feel that the rights and anonymity of both crypto senders and recipients are being eradicated by over-regulation. crypto exchanges Countries that do not comply with the FATF’s latest rules could face being blacklisted. Exchanges under the ATM guidelines must now:

“… obtain and hold required and accurate originator [sender] information and required beneficiary [recipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”

As one London-based digital finance group explained in a letter to the FATF most codes sent along with transactions already contains much of the information that the new rules require despite the fact that cryptocurrency transactions were originally intended to carry a high degree of anonymity for all participants.

This was pointed out to FATF by another company Chainalysis earlier this year who commented that “Virtual Assets are designed to provide a way to move value without the need to identify the participants in a transaction”. The fear is now that this requirement may drive some exchanges and wallet provider to the wall if it is enforced, a point clearly of little concern to U.S. Secretary of the Treasury Steven Mnuchin who commented:

“By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows.”

 

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SEC More Informed Than Expected at DC Blockchain Forum

SEC More Informed Than Expected at DC Blockchain Forum

The week started with the much-awaited Securities and Exchange Commission’s (SEC) first Fintech Forum, held on 31 June in Washington DC.

Issues on the agenda were expected to be related to cryptocurrency assets and DLT with key SEC officials being joined by various legal, financial and technical experts, but what surprised experts was the degree of knowledge SEC representatives already had on a range of crypto-related topics.

Cynics have always labeled the SEC with a lack of understanding on all things crypto, therefore, maintaining a wait n see stance, particularly on matters relating to Bitcoin ETFs. The SEC’s chops were reportedly highly visible at the meeting. Joshua Ashley Klayman, managing member of Klayman LLC, a boutique law firm was, like others, surprised at the SECs acquired crypto knowledge:

“Clearly they have been listening to what those in the community – and their counsel – have been saying to them and they’ve put a lot of effort into understanding this space… It was a much higher-level discussion than the basics of blockchain.”

On the SEC side, Valerie Szczepanik, the SEC’s senior advisor for digital assets through in Ethereum smart-contract programming language when explaining a point about the need for more dialogue between the agency and developers and explained that both the SEC and developers needed “to translate between each other”. She added that both sides need to fill the educational gap when it came to understanding bot regulation and development, pointing out:

“We also learned that the federal securities laws are just as complex to computer scientists as coding smart contracts in Solidity are to regulators.”

Another attendee at the forum went away with a somewhat renewed perceptions of the SEC, Attorney Stephen Rutenberg, a shareholder at Polsinelli and a member of the firm’s Fintech and Regulation Practice, agreed that the SEC’s understanding of DLTs was “beyond what most people think”.

 

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How the ICO Market Has Been Regaining Investor Faith

How the ICO Market Has Been Regaining Investor Faith

In 2018, funds raised from initial coin offerings (ICOs) fell dramatically from over USD 1 and a half billion in January, to under USD 75 million in December.

However, new data showing the activities of the month of May so far indicates that investor faith has begun to regain strength in the light of increasingly highly-rated ICO projects, with 85% of the total projects receiving a high rating between 3-3.5 stars. This is a significant increase, even from April 2019 which claimed an average of just 68% of projects gaining this trusted star rating.

As many viewed ICOs and similar token events as a groundbreaking new way to fund startup projects in the blockchain space, the slow fizzle out of popularity last year was highly disappointing. It seemed to be that these token offerings had collapsed under the weight of up to 80% scam projects flooding the market, as well as crashing prices across nearly all cryptocurrency.

ICO bench data shows that 157 ICOs have been launched in May so far, expanding the total number of published projects to 5,512. There are currently 287 ongoing ICOS, with a further 140 expected in the near future.

A summary of the ICObench ICO Market Half-Monthly Analysis May 2019 report can be accessed for free with a trial subscription on the platform.

Moving away from the established model

Trends away from the established ICO model are likely in reaction to the poor quality and trust standards that became prominent amongst ICOs, beginning in 2017.

The month of May 2019 has so far been overwhelmed by Bitfinex’s USD 1 billion initial exchange offering (IEO) — a relatively new model available to investors where they can participate in a centralized cryptocurrency exchange’s token offering. The exchange involved operates the sales, vetting both the project and prospective investors.

Bitfinex’s IEO has contributed significantly towards this month’s roughly USD 1.075 billion collected in token sales — the highest total funds raised in 2019 to date.

This year has also seen a rise in popularity of security token offerings (STOs). STOs claim to offer a more trusted model than the ICO as the security token issued to investors represents an investment contract, acting similar to ownership information given to investors in the stocks or bonds, just recorded on the blockchain via the token instead.

STOs can be seen as a lower risk than ICOs because they are protected by securities laws that the tokens must comply with, legally enforcing transparency and accountability from the project behind the token.

STOs raised USD 1 and a half million in March 2019; this figure jumps up to over USD 5 and a half million in May so far.

Indeed, because active ICOs have a higher average trust rating than one year ago, it enforces greater trust in investments made across the cryptocurrency market.

The move towards alternative token investment models such as STOs and IEOs could certainly be one reason investors are regaining trust in early blockchain project investment. However, May’s bullish market performance could certainly have also had a great impact on the number of investors willing to participate in token offerings.

 

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IRS Still Dragging Heels on Crypto Rules

The US Internal Revenue Service (IRS) moves to provide clear cryptocurrency taxation guideline to the increasing user base in the United States continues to develop at a snail’s pace with the agency responsible for collecting taxes promising Congress that it will issue new cryptocurrency tax guidance soon.

This, of course, is not the first of such promises over recent times; just last month the lack of response from the IRS in dealing with crypto taxation forced members of Congress on the blockchain committee chaired by Congressman Tom Emmer to provide clarity about filing crypto-related taxes before tax day.

The need for an update on crypto taxation is certainly needed, the last request by the blockchain committee in April stated that “the 2014 guidance by the IRS failed to address fundamental tax questions”, and further spawned more request for clarity. Five years does seem an excessive time to wait given the rise in cryptocurrency’s rise in popularity in the US, and the many questions taxpayers are now asking.

IRS Silence on Cryptocurrencies Is Deafening #Cryptocurrencies #bitcoin,crypto https://t.co/bpLQPBApRS pic.twitter.com/T2YvFMdCQ3

— BitcoinAgile (@bitcoinagile) May 13, 2019

IRS Commissioner Charles Rettig response to Emmer’s request for an update to taxation rules for crypto owners shared many similarities to past responses on the subject from the IRS:

“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance.”

Emmer pointed out the need for urgency in his response to what appears to be IRS complacency on getting to grips with cryptocurrency and pointing taxpayers in the right direction commenting:

“… it has been over a decade since the IRS National Taxpayer Advocate identified, in its 2008 Annual Report, that the ambiguous tax treatment of virtual property and currency transactions was one of ‘the most serious problems encountered by taxpayers.”

 

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How Important is Blockchain Interoperability?

How Important is Blockchain Interoperability_

Blockchain interoperability describes the process by which different blockchains can communicate with one another, allowing a smoother process of sharing information. Many consider interoperability key to the success of blockchain applications being user-friendly, practical, and economically efficient.

Think of it in terms of social media; if everyone’s friends are using different platforms that can’t interact with one another, the success of such platforms is significantly restricted and monopolies will emerge. In the cryptocurrency space, is there really room for success for all the tokens out there running on different blockchains? How useful is a smart contract on one platform if it is not recognized on another?

As major corporate giants including Walmart and Pepsico begin rolling out their own blockchain applications, it seems only a matter of time before a protocol will be developed to enable such platforms to communicate with one another without issue. Several attempts to provide a solution have been rolled out, although their achievements so far have been limited as the technology is still in the early stages of development.

Here are some of the biggest projects to date:

Aion, Quant Network, and XRouter

  • Quant Network’s keystone project is called OverLedger, a ledger system for ledgers themselves, operating as a meta-gateway for connecting blockchain networks. Eventually, the project hopes to connect centralized industries such as financial services to blockchains.
  • Aion is a smart contract platform focused on the interoperability of blockchains and java based contracts. It aims to become the common protocol to be used between blockchains for creating a more efficient decentralized system. It focuses on the concept of a ”federated blockchain network.”
  • The beta version of XRouter was released just last month, claiming to be the first ”blockchain router” on the market. The platform serves as the foundation for multi-blockchain architectures, letting users build Dapps with features from any existing blockchain. By allowing blockchains to communicate, XRouter believes it will promote increased adoption of Dapps.

The fourth industrial revolution

The rise of the autonomous economy is considered to be propelling the world’s fourth industrial revolution, and blockchain plays a significant role in this alongside IoT and AI. However, for these three technological components to synergize efficiently, blockchain interoperability is paramount, else there will essentially be communication blocks between the technology and a lack of user-friendly versatility meaning that blockchain and other decentralized ledger technologies (DLT) will just not be adopted at high enough rates.

With blockchain interoperability running alongside AI and IoT data, the networks can run themselves and grow smarter over time though machine learning. This would be the culmination of the fourth industrial revolution. It would seem only a matter of time before blockchain interoperability becomes a reality for everyday actors in the economy.

Is this one of the biggest hurdles for blockchain in 2019? Probably, yes. But by the looks of the current adoptions rates of the solutions on offer, seeing true interoperability is still several years off.

Really, it is a race between blockchain interoperability projects to create the first mass-adopted solution and reap the rewards.

 

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