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  • Deutsche Bank Research: Crypto to Replace Fiat Currencies by 2030
    by Ana Alexandre on December 6, 2019 at 2:00 am

    By 2030, the demand for alternative currencies will rise, with digital currencies eventually replacing cash, according to recent research from Deutsche Bank. By 2030, the demand for alternative currencies will rise, with digital currencies eventually replacing cash, according to recent research from Deutsche Bank.In the “Imagine 2030” report, Deutsche Bank strategist Jim Reid raised awareness of the challenges the existing fiat system has encountered in recent years, specifically with the emergence of cryptocurrencies. Reid stipulated that people’s heightened demand for dematerialized means of payment and anonymity could drive more individuals to digital currencies.Mainstream adoption and co-occurring challengesIn order to gain wider acceptance, digital assets need to overcome three major hurdles. These include perceived legitimacy in the eyes of governments and regulators, which entails price stability and allows for global reach in the payment market. According to Reid, the establishment of alliances with key stakeholders like mobile apps and card providers will enable this development.At the same time, Reid pointed out that with mainstream adoption, new challenges will arise. Among major threats to the purported digital currency-based financial system, Reid named dependence on electricity, cyberattacks and a digital war. “As that occurs, the line between cryptocurrencies, financial institutions, and public and private sectors may become blurred,” Reid wrote.Countries examine CBDCIn the meantime, world governments have been actively debating the need to develop national digital currencies. Earlier today, Bank of Japan Governor Haruhiko Kuroda said that there is no public demand for a central bank digital currency (CBDC) in the country. Kuroda noted the increasing demand for cash payments and added that the bank had been conducting technical and legal research into the matter.The British Virgin Islands has taken a more proactive approach to CBDCs, announcing that the country is developing a digital currency dubbed BVI~LIFE in collaboration with blockchain startup LifeLabs. The currency is part of a broader initiative to grow the local fintech sector. It will be pegged to the U.S. dollar.The central bank of France plans to pilot a CBDC for financial institutions in 2020. […]

  • CryptoBridge Closes Down and Waves Relaunches, DEXs Face Tough Times
    by Stephen O'Neal on December 6, 2019 at 2:00 am

    CryptoBridge DEX went out with a bang, citing market conditions and increased regulations. Should others be worried? Earlier this week, decentralized cryptocurrency exchange CryptoBridge abruptly announced that it was shutting shop, leaving just two weeks for its customers to retrieve their funds. Around the same time, the Waves DEX also shut down to resume operations as a hybrid exchange.While Waves ostensibly decided to “merge all the infrastructure teams” together and focus on one product, CryptoBridge went out of business completely. The decentralized platform cited market conditions and increased regulations as driving factors for its closure. So, should other crypto trading platforms, decentralized or not, be worried?  DEXs and the regulatory uncertainty surrounding themDEXs are cryptocurrency exchanges that allow users to retain ownership of their funds and private keys. Specifically, they provide peer-to-peer services that allow transactions between two interested parties directly on the blockchain. This feature distinguishes DEXs from centralized exchanges — which see significantly more use, accounting for more than 99% of the global cryptocurrency trade volume. Unlike decentralized platforms, centralized exchanges (such as Coinbase, Kraken, Binance, Bittrex, etc.) act as middle men, connecting people willing to trade cryptocurrencies while holding their assets and private keys on company-owned wallets.Related: Can Crypto Exchanges Ever Be Truly Decentralized?While the majority of cryptocurrency traders still have an easier time trusting a third party with their private keys, DEXs offer some unique benefits over centralized exchanges, namely security, since they rely on smart contracts instead of servers. Another important advantage is anonymity and lighter Know Your Customer requirements — at least, that was the case until recently, as CryptoBridge mentioned strict regulations as part of the reason for its closure.Nevertheless, compliance is not an entirely new term for DEXs. As the phenomenon rose in popularity last year, many well-known cryptocurrency exchanges like Binance and Huobi decided to use their brand to launch their own decentralized marketplaces while applying the same compliance principles, which are increasingly important for keeping crypto trading juggernauts afloat against the backdrop of regulatory scrutiny. Zachary Kelman, managing partner at law firm Kelman PLLC, told Cointelegraph that there is a lot of confusion around DEXs because “most people tend to think of complex organizational structures simply as publicly identifiable brands, and in turn overlook the underlying legal reality.” He went on to add:“For example, people may say ‘Did you hear what happened to Bittrex?’ but it is not clear whether they are talking about a US-based corporation, a Maltese entity, or the Liechtensteinian company currently operating its international exchange. This situation becomes more confounding when applied to DEXs.”A properly organized DEX, Kelman continued, “is not a corporate entity, a foundation, or even a group of people,” but a “computer code.” He elaborated:“There are secondarily liable parties, like the web hosts, and perhaps more directly liable parties, like the creators of the DEX or the inventors and profiteers of some kind of DEX-underlying asset, but at some point, a DEX can enter into a sort-of ‘regulatory twilight zone’ where it is not clear whom to hold responsible for regulatory non-compliance. Non-lawyers typically think of companies as pure brands and can have a difficult time grappling with this reality.”A cautious DEX that expected regulatory scrutiny from the get-goCryptoBridge was founded in July 2017 as “a gateway which provides access to BitShares: a high performance, scalable blockchain” that, in turn, allows users to trade established cryptocurrencies as well as “up-and-coming tokens and altcoins.” To fund the development of the software platform, CryptoBridge launched a native token called BridgeCoin, allegedly distributing 50% of all trade revenue to its stakeholders.The company said it intentionally avoided holding an initial coin offering due to the regulatory difficulties it would have posed in the United States. “Though we are not from the US we would still like to stay legal under most jurisdictions and a public mineable cryptocurrency is exempt from such regulation,” the CryptoBridge team wrote. In October 2019, the exchange announced that all its new and existing and customers were required to submit user verification before continuing to deposit and withdraw funds in order to protect both themselves and CryptoBridge from “being held responsible for any illegal intentions or money laundering activities.” The statement read: “We are facing the 5th EU Anti-Money Laundering Directive (AMLD5) and will adjust our gateway services to pave the way for CryptoBridge moving forward.”That month, CryptoBridge’s website was visited about 320,000 times, with the majority of clicks coming from Russia and Bulgaria, data provided by Similar Web shows. Then, on Dec. 2, the DEX announced that all of the firm’s services and servers will be terminated within two weeks. Users will be able to withdraw funds from the exchange until Dec. 15 — the last day of operation. The statement reads:“Please note that user verification is required by EU law for all withdrawals. We highly recommend that you start the process as early as possible as verification can take a few days.”The company cited market conditions, increasingly strict regulations and lack of funds as reasons for its decision to close and not pursue further development. As a CryptoBridge spokesperson confirmed to Cointelegraph, the exchange is headquartered in Copenhagen, so once AMLD5 began including wallet custodians into its scope of regulation, it was forced to terminate operations. Additionally, there were other reasons according to the spokesperson: “As our gateway decentralization efforts and resources were insufficient to materialize a solution before January 1 2020 on account of greatly reduced trading volume and listings, and with much stricter AML regulation to take place which we explicitly didn't like, our decision was to stop operations.”‘Hard closure’: Users are left angered as CryptoBridge erases social media After the announcement was made, CryptoBridge immediately shut down all of its social media channels. As the CryptoBridge spokesman explained to Cointelegraph, the move was advised by the exchange’s legal team:“Suggestion from the legal team was to minimize negative publicity and efforts required to contain it on social media which was primarily being used as one-way method of informing the public, but in situations like this it’s hard to filter out the FUD as opposed to real issues requiring assistance. We’ve therefore decided to focus our efforts on the most appropriate way of handling support which is through our wallet. Lack of resources due to downscaling further supported this decision.”The decision to precipitously delete all social media channels resulted in noticeable distress among users while also spawning a number of impersonators on Twitter. For instance, an account named CryptoBridgeEU began posting messages that conflicted with the platform’s original announcement, claiming that CryptoBridge’s closure was only temporary. As CryptoBridge’s representative told Cointelegraph, the team has already reported the account, adding that “Email and support tickets through the official wallet are the remaining methods of communication.” However, Kelman told Cointelegraph that, to him as a lawyer, CryptoBridge’s decision making seems indicative of other underlying factors: “When I see this I am immediately concerned that the project might have deliberately exposed itself to regulation with which it cannot or does not wish to comply, and its promoters see themselves as liable for it and are either panicking or attempting to do the best they can to wind up the operations.”Moreover, users report having problems with withdrawing procedures. CrpytoBridge trader and Reddit user u/Apollohasgas told Cointelegraph that they cannot transfer their funds out of the platform:“About 6 months ago I logged on to Cryptobridge and deposited about $800.00 via BTC (In addition, I had maybe $500.00 left in the account from prior trades). After accepting my deposit, I purchased some cryptocurrencies. Subsequently, when I tried to transfer my funds out of CB, I was only then informed that I must comply with their new KYC before any funds would be relinquished.”According to the trader, enacting Know Your Customer and Anti-Money Laundering procedures “was not an oversight but clearly intentional on Cryptobridge’s part.” After u/Apollohasgas provided CryptoBridge with their personal information including full name and residential address as well as scans of their driver’s license and passport, the platform’s administration requested a copy of u/Apollohasgas’ latest tax return. “I did not comply with that request,” the trader told Cointelegraph, adding: “I then contacted CB support asking for help and expressing my frustration that so much of my personal information was being requested. I never heard back from them. Cryptobridge is a scam. I have come to learn that many in the crypto community are aware of this.”u/Apollohasgas also suggested that some users will just accept that their funds are being confiscated “rather than supply the requested personal information.” Indeed, another Redditor, u/KeepitRaul, told Cointelegraph that he chose not to withdraw his funds. u/KeepitRaul then went on to say that the manner in which CryptoBridge has “left everyone in the lurch” made him think the entity is “something close to an exit scam,” but clarified:“Maybe a ‘hard closure’ would be a better term. There is still enough time to get your funds off but I have read that verification is a long process that takes time (they even mention 2 days in their notice) and they’ve probably chosen this route so that many people, like myself, don’t bother.”DEXs are still attractive, but implementation is trickyAccording to experts, CryptoBridge’s departure marks a scenario in which other trading platforms are left in danger of facing similar symptoms. Cal Evans, founder of compliance and strategy firm Gresham International, surmised: “The closure of CryptoBridge is a sign that the new EU regulations are having an impact. If the new collection of data is married with the storage of data (GDPR) this becomes a massive undertaking for a smaller firm. It also removed the anonymity from DEX exchanges which, in essence, kills their business model.”Similarly, Kelman told Cointelegraph that he “wouldn’t be surprised if we see similar news given the difficulty of successfully going all the way from the idea of a DEX into the DEX ‘regulatory twilight zone’ without getting caught in the headlights of anxious regulators.” He did, however, say that a “properly implemented DEX” still has a lot of potential to dominate crypto markets.Indeed, DEXs continue to gain popularity in the crypto space. Last week, major U.S. cryptocurrency exchange Poloniex purchased the largest decentralized exchange on blockchain network Tron (TRX), which will now operate under the new name “Poloni DEX.” A month prior, controversial British-American entrepreneur John McAfee launched his own DEX.Meanwhile, Waves has relaunched by shutting down Waves.DEX and moving all activities to Waves.exchange, which is marketed as a “hybrid” platform. The new exchange is allegedly non-custodial, meaning that user funds are not held on company-owned wallets — just like with most DEXs. Notably, the company claims that it “has no plans to introduce KYC for trading or cryptocurrency transactions.” CryptoBridge’s team, on the other hand, does not have any plans for the future. “Current team is planning to disband after the termination process is over,” the exchange’s representative told Cointelegraph. […]

  • BitFlyer’s New ‘Instant Buy’ Feature Lets Users Buy Crypto With Cards or Transfers
    by Joeri Cant on December 6, 2019 at 12:58 am

    BitFlyer introduces Instant Buy on its European exchange platform, allowing users to buy crypto using a credit card, debit card or local instant transfer. Tokyo-based cryptocurrency exchange bitFlyer announced the launch of ‘Instant Buy’ on its European exchange platform.BitFlyer launched its latest feature Instant Buy on Dec. 5 to provide its European users with the ability to buy cryptocurrency using a credit card, debit card and local instant transfer methods like Sofort, iDeal and GiroPay. The newly launched feature, which is available on desktop computers and smartphones, aims to make it more convenient for users to buy crypto using their preferred payment method. It also looks to provide a new avenue for crypto beginners who want an all-in-one solution to purchase, store and secure their cryptocurrency investments. BitFlyer Europe COO Andy Bryant said of bitFlyer’s buy/sell platform:“By making it similar to that of a traditional e-commerce experience, we are helping bringing cryptocurrency to a mainstream audience, while also giving experienced users a faster and simpler way to get their currency.”bitFlyer Europe launched in January 2018 as a fully owned subsidiaries of bitFlyer, Inc., a major player in Japanese cryptocurrency. Cointelegraph contacted bitFlyer regarding the launch of Instant Buy but had yet to receive a response as of press time. This article will be updated if new comments come in.BitFlyer added 5 altcoins to its trading platforms in Europe and the U.S.In September, bitFlyer announced that it was adding five new altcoins to its European trading platform: Bitcoin Cash (BCH), Ethereum Classic (ETC), Litecoin (LTC), Lisk (LSK) and Monacoin (MONA). All of these altcoins were available immediately to its European customers, while bitFlyer U.S. customers had immediate access to only three of these coins: BCH, ETC, and LTC.A month prior to that, bitFlyer and technology services company Tpoint Japan joined forces to allow local customers to exchange loyalty program points for Bitcoin (BTC) and earn rewards for paying in crypto.In July, the Japanese commercial giant Sumitomo Corporation partnered with bitFlyer Blockchain to launch a blockchain real estate business. Yuzo Kano, managing director of bitFlyer Blockchain, said at the time that the aim of the project was to enable rental parties to complete the entire process from smartphones. […]

  • Known Crypto-Hater Sherman to Chair Congressional Subcommittee on Investor Protection
    by Joeri Cant on December 6, 2019 at 12:45 am

    Known crypto-hater U.S. Congressman Brad Sherman is elected to serve as Chairman of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets. The anti-crypto United States Congressman Brad Sherman (D-CA) has been elected to serve as Chairman of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.On Dec. 5, Chairwoman of the House Financial Services Committee Maxine Waters (D-CA) announced that Sherman was elected to take up the position of Chair at the subcommittee that oversees the Securities and Exchange Commission (SEC), the New York Stock Exchange and the Financial Industry Regulatory Authority.Sherman vs crypto and maybe the internetSherman, who is an American politician serving as a Democratic member of the U.S. House of Representatives since 1997, is known to be a formidable opponent of Bitcoin and cryptocurrencies in general.Largely pro-crypto congressman and Sherman’s colleague on the Financial Services committee Warren Davidson (R-OH) recently told Cointelegraph that Sherman really doesn’t like anything in the cryptocurrency space. Davidson went on to say:“In my view, [Sherman’s] goal is essentially to try to ban the internet. He’s like ‘we’re going to ban crypto, we need to ban crypto, the only reason to have any crypto asset is to launder money and evade taxes. Go back, rewind the tape. Every hearing on crypto, that’s Brad Sherman. He doesn’t like the space.”Sherman has expressed opposition to any money that challenges the U.S. dollar’s role as global reserve currency. He continues to argue for an outright ban on cryptocurrency. This outspoken negative stance towards crypto earned him some criticism from Bitcoin bull Max Keiser, who said that Sherman is going to a gunfight with a knife, adding: “He has failed to take on board exactly what the dimension of this battle is going to be [...] He doesn’t understand he’s already lost.”Crypto could ‘displace or interfere with dollar’In October, Sherman appeared to give unlikely weight to the idea that a disruptive financial instrument, such as cryptocurrencies, can succeed in taking power away from the dollar. He said:“Cryptocurrency either doesn’t work, in which case investors lose a lot of money, or it does achieve its objectives perhaps and displaces the U.S. dollar or interferes with the U.S. dollar being virtually the sole reserve currency in the world.&rdquo […]

  • EU Won’t Let Stablecoins Enter Market Until Risks Are Addressed
    by Helen Partz on December 5, 2019 at 9:01 pm

    The benefits associated with stablecoins pale in comparison to their risks and challenges, according to a new statement from EU authorities. No global stablecoin project will begin operation in the European Union (EU) until the associated risks to monetary sovereignty are addressed, according to EU authorities.In a joint statement adopted by the Council of the European Union and the European Commission (EC), the Council and the Commission admitted that stablecoins may be effective at providing cheap and fast payments, but they have far more risks and challenges.The statement was approved by the Economic and Financial Affairs Council (ECOFIN), one of the oldest configurations of the Council, on Dec. 5, based on the data in an official document released in late November.It’s not clear whether the new statement will somehow affect any further course of action or would become the basis for anything legally binding. Cointelegraph contacted the Council’s press officer for comment but the representatives available were evasive.Stablecoins’ potential to facilitate cross-border payments vs associated risksIn their statement, the EU authorities have outlined multiple risks and issues associated with adoption of stablecoins — digital currencies pegged to another asset to prevent volatility usually seen in cryptocurrencies. If adopted on a global scale, stablecoins pose a threat to monetary sovereignty, the Council and the Commission argued.The statement reads:“These arrangements pose multifaceted challenges and risks related for example to consumer protection, privacy, taxation, cyber security and operational resilience, money laundering, terrorism financing, market integrity, governance and legal certainty. [..] These concerns are likely to be amplified and new potential risks to monetary sovereignty, monetary policy, the safety and efficiency of payment systems, financial stability, and fair competition can arise.”Challenges raised by global stablecoins require a coordinated global responseAs such, solving the challenges raised by global stablecoins requires coordinated efforts from global jurisdictions, the authorities noted. Moreover, entities that plan to issue stablecoins in the EU should provide “full and adequate information urgently to allow for a proper assessment against the applicable existing rules,” the statement notes.The Council and the Commission concluded:“No global ‘stablecoin’ arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.”While pointing out a number of risks associated with stablecoins, the EU authorities noted that they welcome central banks working to assess the costs and benefits of central bank digital currencies (CBDCs) and working on providing fast and inexpensive cross-border payments.Yesterday, the governor of the central bank of France announced the bank’s plans to pilot a CBDC financial institutions in 2020. The official stated that the bank will start testing the digital euro project by the end of the first quarter 2020. […]