DFC

"The future in five years, if we don’t have a good answer, is basically China re-wiring” a large part of the world “with a digital renminbi running on their controlled blockchain,” Marcus said. He warned about the prospect of “having a whole part of the world completely blocked from U.S. sanctions and protected from U.S. sanctions and having a new digital reserve currency” with no alternative.

Zuckerberg reassured that Libra would operate under a coalition of partners and independently from Facebook, but he also made clear that Facebook will not help launch the payments system anywhere in the world until U.S. regulators approve.

"Libra will be backed mostly by dollars and I believe it will extend America’s financial leadership... As well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed."

"It’s an extract from one of his books written in 1930 about the origins of The Bank for International Settlements, the so-called central bankers’ bank set up in the same year to manage reparations payments in the aftermath of World War One. You know what they say about what’s under the sun..."

Bitfinex claimed Friday that it was the “victim of a fraud” at the hands of Crypto Capital, a payment processor that allegedly lost $880 million of Bitfinex’s money. Crypto Capital’s president, Ivan Manuel Molina Lee, was arrested Thursday by Polish police on charges of money laundering.

Big corporations and regulators don’t like the unsupervised free-for-all of Bitcoin. They like to control things. And that’s exactly why Bitcoin was invented – to escape the control of a central authority but still have a system that works. It’s a brilliant concept, and Bitcoin’s success shows that it works.

The regulatory control that most governments seek is generally related to money laundering and illegal activity. While cryptocurrency creators have no desire to foster such practices, many nevertheless hope to move away from the sorts of regulatory controls that are seen as centralized, less cost-efficient and often domineering.

RTGS.global aims to link together the existing wholesale payments infrastructure run by central banks within their borders, to settle cross-border payments in real time, and vastly cut down on the costs and burden of the correspondent banking system.

"The main gap, or next frontier in terms of central banking activities would be to find efficient ways to connect our fast payment systems so that they can be used by citizens to transfer remittances to send money back home, to send money across borders, so that cryptocurrencies would be less needed in the first place."

Bitfinex could very well be the victim and there could be many others, although not enough information is available yet to certainly say if they were indeed victims or not, but it would seem highly likely. At the same time, it’s interesting that this is only coming to light now and did not make more noise when it actually occurred or rather noticed. You would think with such a large amount of money someone would raise the alarm much sooner.

The rise and popularity of stablecoins is subjecting the crypto world to mass cognitive dissonance.

Telegram, the messaging app company turned blockchain startup, has released an early desktop wallet for its “gram” token. Now users can download the test app for MacOS, Windows and Linux 64 bit on Telegram’s official website and get their keys on the TON testnet.

One entity on the cryptocurrency exchange Bitfinex appears capable of sending the price of Bitcoin higher when it falls below certain thresholds, according to University of Texas Professor John Griffin and Ohio State University’s Amin Shams. Griffin and Shams, who have updated a paper they first published in 2018, say the transactions rely on Tether, a widely used digital token that is meant to hold its value at $1.

Existing securities rules could apply to stablecoin digital currency initiatives such as Facebook’s Libra project to help realize its benefits.

Short version: Tether is the internal accounting system for the largest fraud since Madoff. Read on for the long version.

On Nov. 3, the U.S central bank posted a new job opening to its website, looking for a new manager who is expected to contribute to the research of digital currencies, stablecoins and distributed ledger technologies.

Perhaps the takeaway is that when banks refuse to do business with crypto traders, or when a government bans trading altogether, it doesn’t stop traders from trading. It just forces them to find creative solutions. If it were easy for crypto exchanges to use the traditional banking system, there would be no need for Tether at all.

“Our findings show that tether grants were potentially timed to follow bitcoin downturns and subsequent bitcoin/tether trading volumes increased … However, the impact of tether grants on bitcoin returns were not statistically significant, and therefore tether issuances cannot be an effective tool for moving bitcoin prices.”

What is laid bare for the world to see is an architecturally schizophrenic code artifact claiming to be a new reliable platform for global payment infrastructure. Yet the actual implementation diverges from this goal in bizarre ways when one actually dives into the codebase. I’m sure there is an interesting story about the internal corporate politics of this project and as such I thought it apt to do some diligence on what I see as a truly strange set of architectural choices that break the entire system and put consumers at risk.

To obtain publication, Griffin and Shams have released a weakened yet equally flawed version of their prior article. The revised paper is a watered-down and embarrassing walk-back of its predecessor that still suffers from the same methodological defects, coupled with the clumsy assertion that one lone whale may be responsible for the rise of bitcoin in 2017.

Paxos Trust, a blockchain company that caters to financial institutions, has been given the green light to settle stock trades in near real-time in a direct threat to the Depository Trust & Clearing Corp.’s half-century equity market dominance.

"The SEC has put significant limits on Paxos’s experiment. Only about 140 of the most actively traded, least volatile stocks, like Exxon Mobil Corp. and Bank of America Corp. , are eligible for the project. The number of trades Paxos can settle will also be capped at 1% of average daily trading volume of those stocks, according to the SEC’s letter."

Löber posed several general questions in relation to the practical operation of digital assets, which require definitive answers: “Can you use these assets as collateral? Can you net a position in a digital asset with positions you have in traditional assets? How do you treat insolvency? How do you deal with liabilities and remedies? And, in conflicts of law, what is the relevant forum for settling disputes?”

“A basket like Libra’s will not work. It threatens the sovereignty of states and opens up a window for capital flight. That’s why you’ve seen politicians and regulators furiously defend their monopoly to control transactions.”

Binance became the first crypto exchange to implement the fiat gateway of stablecoin operator Paxos. The Paxos Fiat Gateway allows its users to swap between dollars and stablecoins on a one-to-one basis.

“A global stablecoin network, if poorly designed and unregulated, could pose risks to financial stability. The failure of a stablecoin to operate as expected could disrupt other parts of the financial system. For example, the inability to convert stablecoins into domestic currency on demand or to settle payments on time could create credit and liquidity dislocations in the economy. If a stablecoin’s credit, liquidity, market, and operational risks are managed ineffectively, it could face a loss of confidence. This loss of confidence could lead to a run, where many holders attempt to liquidate their stablecoins at the same time. In an extreme scenario, holders may be unable to do so, with potentially severe consequences for domestic or international economic activity, asset prices, or financial stability.”

Forty wallets, tools and block explorers plus 1,700 GitHub commits have how now been built on its blockchain testnet that’s seen 51,000 mock transactions in the past two months. Libra nodes that process transactions are now being run by Coinbase, Uber, BisonTrails, Iliad, Xapo, Anchorage and Facebook’s Calibra. Six more nodes are being established, plus there are 8 more getting set up from members who lack technical teams, meaning all 21 members have nodes running or in the works.

Last week California-based Silvergate Bank's parent went public on the New York Stock Exchange. It was a small IPO, raising about $40M and it’s a small bank (about $250M market capitalization and $2.2M of assets).

Silvergate Bank specializes in reaching debanked bitcoiners, joining several other financial institutions including Metropolitan Bank, Signature Bank, and Cross River Bank in catering to the financial needs of the growing cryptocurrency space. Silvergate's crypto clients include Gemini, Kraken, Bit Flyer, Paxos, trueUSD, Coinbase, Polychain Capital, and Bitstamp.