Petro, e-Krona, FedCoin, CryptoRuble and more The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. As society starts to move away from cash, central banks’ potential to reap profits off issuing that cash could be threatened. Many governments are worried about the mass adoption of cryptocurrencies and hence are considering the merits of creating a central bank digital currency (CBDC). Central banks have woken up to the risks cryptocurrencies can pose to policy makers’ bread-and-butter business: the economy. Hence the debate about the pros and cons of government digital currency closed private blockchains versus public blockchain cryptocurrency are increasingly on the agenda of policy makers and investors alike. The mainstream media often wrongly refer to government backed digital currencies as cryptocurrencies without defining the new concept of central bank digital currency. Cryptocurrency is a blockchain asset and not the liability of anyone. Central bank issued digital currency is based on a fractional reserve banking system based on debt and the liability of increasingly highly indebted nation state central banks.  Image Source: The BIS (Bank for International Settlements) report Cryptocurrencies were created with the intention to make central banks, the traditional bastions of monetary policy, redundant in the face of a peer-to-peer electronic cash. 10  years after the publication of the Satoshi Nakamoto’s Bitcoin whitepaper, cryptocurrencies are considered to be utilized by the very institutions they were meant to subvert. Blockchain, the distributed ledger technology underpinning Bitcoin, is the tool that can be extended to a central bank digital currency. Most of the current amount of money is digitized already, whether in bank reserves with the central bank, or in checking accounts at the local bank. Only a fraction of money supply is in paper money bills in circulation. But digital money, locked up in private ledgers and exchanged through dozens of heterogeneous databases en route from creditor to debtor, lacks the speed, stability, scalability, and security of a good cryptocurrency. ‘If you can’t beat them, join them’ Many countries are increasingly thinking about a strategy of how to deal with the global rise and mass adoption of cryptocurrencies. If Bitcoin is the money of the people, fiat currency is the money of the state. Governments and central banks from India, Japan, Canada, Russia, Switzerland to Singapore and the Marshal Islands are having projects as to how best create a government backed digital currency. Several other governments, including China, Estonia, and Iran, have discussed plans for their own digital currency. Singapore has project UBIN and the Bank of Canada has Project Jasper and the United States is toying with the idea of a FedCoin, whereas Sweden’s Riksbank is contemplating the ‘e-Krona.’ In Sweden, the demand for cash has dropped considerably over the past decade. Already, many retail stores do not accept cash and some Swedish bank branches no longer disburse or collect cash. In response, the Riksbank has embarked on a project to determine the viability of an e-Krona for retail payments. No decision has yet been taken in terms of technology. The Marshall Islands will issue its own cryptocurrency that will be circulated as legal tender along with the U.S. dollar. The Head of the Swiss Stock Exchange has appealed to the Swiss National Bank to (SNB)  to launch the e-Swiss Franc. In response to these comments, the SNB repeated its message to the media that it did not consider any need for such a move. Mounting calls for Switzerland to introduce a blockchain-based national cryptocurrency therefore continue to fall on deaf ears at the Swiss National Bank. Switzerland is a rich country with a thriving Crypto Valley and only small wealth disparity compared to Indonesia and other emerging markets but it seems that developments in fast growing countries like Indonesia could have been on the mind of the Head of the Swiss Stock Exchange. While Bank Indonesia hasn’t banned exchanges from offering cryptocurrencies, it has asked investors to refrain from owning, selling or trading crypto token despite the growing number of Bitcoin investors. The Indonesian central bank doesn’t deem digital currencies as legal tender. Petro, an oil-backed cryptocurrency in Venezuela, was issued in an attempt to help the national economy. $735 million was raised during the first day of the pre-sale. President Maduro hopes ‘the petro will allow the ailing OPEC member to skirt U.S. sanction.’ Kazakhstan on the other hand is considering to follow Japan’s lead to make cryptocurrency legal tender and to sponsor its own state cryptocurrency, the Kazakhstan CryptoTenge, a digital asset tied to fiat. The CryptoRuble shall be promoted for circulation on international markets, according to Russia’s Deputy Minister of Economic Development Oleg Fomichev, who stressed the CryptoRuble is designed to become Russian “digital money in light of the digital economy.” Russian President Vladimir Putin stated that the Stone Age has not ended because humanity has run out of stones but because new technologies have appeared. The promise of central bank digital currencies Central Bank digital currencies or CBDC for short is meant to be an extension of existing central bank issued fiat money.   CBDC is not a well-defined term. It is used to refer to a number of concepts. However, it is envisioned by most to be a new form of central bank money. That is, a central bank liability, denominated in an existing unit of account, which serves both as a medium of exchange and a store of value. There are notes and coins available to anyone and reserve and settlement accounts open only to licensed banks, already in electric form. However this is not based on blockchain and currently used for interbank payments. The Bank for International Settlements in a report out in March, Central bank digital currencies, stated that Central banks must carefully weigh the implications for financial stability and monetary policy of issuing digital currencies.         Image Source: The BIS (Bank for International Settlements) report CBDC is potentially a new form of digital central bank money that can be distinguished from reserves or settlement balances held by commercial banks at central banks. There are various design choices, including: access (widely vs restricted); degree of anonymity (ranging from complete to none); operational availability (ranging from current opening hours to 24 hours a day and seven days a week); and interest bearing characteristics (yes or no). It raises old questions about the role of central bank money, the scope of direct access to central bank liabilities and the structure of financial intermediation. Part of the current debate is the question of whether CBDC should be widely available or tightly restricted.  A CBDC open to all would in effect allow anyone to have an account at the central bank similar to the idea that with Bitcoin you are the bank beyond your mobile phone being a Swiss bank account.   CBDCs would work “peer-to-peer” very much diminishing the role of traditional banks or through the banking system helping banks to maintain their current dominant role. Commercial banks' reliance on customer deposits may become less stable, as deposits could more easily take flight to the central bank in times of stress.  A national government digital currency would allow “digital runs” to the central bank. A CBDC for all would challenge the current model of banks taking customer deposits and using that money to fund the lending that helps drive the economy. The consequences for bank business models and financial stability would need to be carefully parsed. ‘Everyone can create money, the problem is to get it accepted’ (Hyman Minsky, an American economist) Money is the ultimate network effect and both cryptocurrencies as well as central bank digital currency can multiply these effects as well as diminishing the current acceptance of fiat money in the global financial system. A good thing about cryptocurrencies is that nobody owns it in the sense that it's a democratic arrangement through the distributed ledger we all own, the ownership of the block. And you can then buy parts of it — bits or part of the chain. In other words, you can't QE  (Quantitative Easing) it, it has a discipline inherently built into the system. The blockchain economy will provide ample choice and will be a disciplined market and asset based economy. Thinking carefully about the future of money is timely in view of new technologies and increasing use of electronic payments among rising debt levels. Each legal jurisdiction considering the launch of a CBDC should carefully and thoroughly consider the implications before making any decision. Still, it is not yet clear whether CBDCs for consumers and businesses are necessary or desirable. The answer will clearly differ country by country. Bitcoin has put the spotlight on an old failing of  current system: cross-border retail payments and the rising risk of central bank policy mistakes. CBDC are a way of government rising to the bitcoin challenge. […]

Crypto markets have seen slight growth in the past 24 hours, with top 10 coins listed on Coinmarketcap in the green. May 20: Crypto markets saw some growth over the past 24 hours, with all of the top ten cryptocurrencies listed on Coinmarketcap currently in the green and total market capitalization approaching $392 bln. Market visualization from Coin360 Bitcoin (BTC) is up around 3 percent in 24 hours to press time, currently trading at $8,520. Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index Ethereum (ETH) has crossed the level of $700, currently trading at $719 with an increase in value of about 3% over the past 24 hours. Ethereum price chart. Source: Cointelegraph Ethereum Price Index Total market cap is around $392, slowly recovering after it dropped to as low as $361 on May 18. Total market capitalization chart. Source: CoinMarketCap A new entry into the top 10 altcoins by market cap, Tron (TRX) has seen some of the largest gains over the past 24 hours, up 11 percent and trading at $0.076 by press time. Bitcoin Cash (BCH) is trading at $1,290. Up 9 percent in 24 hours to press time, the coin has seen the biggest weekly loss of the top 10 contenders - around 12.5%. The crypto markets overall have seen a drop of around 10 percent during this week’s Consensus conference, instead of a boost that was predicted by some analysts, such as Fundstrat’s Tom Lee. In the wake of the decline, Lee commented that the crypto industry lacks the “trifecta of progress” in the form of institutional tools, support from banks, and regulatory clarity. Earlier this week, Ethereum Foundation advisor William Mougayar, claimed that regulators lack a fundamental understanding of cryptocurrencies, with particularly the US Securities and Exchange Commission (SEC) lacking an understanding of the core nature of the industry and trying to apply a one-size-fits-all approach. May 18, Cointelegraph reported that the Supreme Court of India has ruled that no complaints can be filed in any High Court of India against the Reserve Bank of India’s (RBI) recent ban on banks servicing crypto-related accounts. […]

Popular sitcom Silicon Valley features ‘51 percent attack’ on Pied Piper crypto token - but is such an attack as damaging as the show suggests? Most modern technological marvels make their way into mainstream media, but a select few are influential enough to feature on some our favourite TV shows. Bitcoin and cryptocurrencies are no exception, having captured the imagination of millions around the world during a breakout period in 2017. Primarily driven by Bitcoin’s astronomical boom in value as the year drew to a close, people from all walks from life had either heard about Bitcoin or were actively looking to get involved. With mainstream media headlines came all the fanfare with it, and popular TV show writers weren’t about to be left behind. This led to Bitcoin being covered by famous comedians Ellen Degeneres as well as John Oliver on their respective shows. Both comedians gave satirical takes on Bitcoin. While these should be taken with a pinch of salt, both celebrities reach millions of viewers on their shows, meaning whatever perception is portrayed has the chance of influencing a significant number of people. Bitcoin and cryptocurrencies have also featured in popular TV shows over the last few years, with Big Bang Theory being a notable series to have talked about Bitcoin. Following in their footsteps, some of the narrative of Silicon Valley’s season 5 is heavily centred around the topic. Silicon Valley - a show about tech startups For those unfamiliar with the show, Silicon Valley is centred around the lives of five programmers and a startup company based in Silicon Valley, California. If you’re a fan of the show, and haven’t watched season 5, this is an official spoiler alert! The star of the show Richard Hendricks creates an app known as Pied Piper which is a data compression platform. The show ebbs and flows between projects succeeding and failing in a parody of the real world of IT startups. The fourth and fifth season, which aired in 2017 and 2018 respectively, slowly introduce the concept of decentralized blockchain systems and cryptocurrency using the characters in the show. The protagonist, Richard, comes up with a revolutionary idea in season 4. He dreams up a decentralized, peer-to-peer internet using a network of cellphones which eventually ties into the original Pied Piper app. The idea has even led to the creation of a parody website, while actual projects like Storj and Sia are just two examples of real-world working examples of decentralized data storage services powered by blockchain technology. Season 5 is centred around the actual development of Richard’s new decentralized internet. Midway through the season, Richard loses funding from an investor, and his software engineer Gilfoyle suggests that they launch an initial coin offering (ICO) to fund the project. While the ICO doesn’t exactly raise millions, the team continues development. The series finale however, brings forth an interesting scenario for some real world cryptocurrencies. Silicon Valley’s 51 percent attack A newly introduced ‘villain’ teams up with regular character Laurie, and launches a ‘51 percent attack’ on Pied Piper’s system. In essence, if a group of miners gains control of 51 percent of a cryptocurrency’s hashrate, they will be able to control transaction confirmations, allowing them to halt transactions and even be able to reverse and double-spend coins. More information can be found in Cointelegraph’s guide to proof-of-work algorithm. In the show, we’re told that the attackers could delete users and developer apps and crash their newly created token. While this makes for really good TV - we need to take a step back and consider if this is truly representative of what could actually happen in real life. This phenomenon is not new to the cryptocurrency community and was a talking point when Bitcoin’s scaling debate was heating up in 2017. It’s still relevant today, and planned upgrades to Ethereum’s network could rule out this type of attack. Notably, smaller cryptocurrencies like Krypton and Shift were hit by these attacks back in 2016. Cornell University professor and developer Emin Gün Sirer believes the extent of these attacks is slightly embellished on the show: “Miners at 51 percent or more have a lot of powers, but they do not have the ability to change the actual rules of the system, nor can they usurp funds. They can rewrite the existing blockchain in a limited fashion: they cannot introduce transactions that don’t already exist, they can omit any transaction that they want, and they certainly cannot change any of the existing rules.” As Sirer suggests, Hollywood often takes liberties when it comes to the depiction of real-world scenarios. That is the art of storytelling on television, the bigger and bolder a story or scenario the more exciting it is for the viewer. Piedpipercoin lives While there wasn’t a lot of reaction to the actual season 5 finale, Alphabitfund analyst Brad Mills shared a link on Twitter that raised concerns around the actual creation of a Pied Piper cryptocurrency. As pointed out by Mills, the coin is not affiliated to the show’s producers HBO, but was created in May through an airdrop. It is with sadness & disappointment that I report how @piedpipercoin has transformed from one of the best parodies in Crypto, to a cheap get-rich-quick scheme by opportunists, non-affiliated with HBO or the Silicon Valley show 😥 It started out fun, now it's just another scam. pic.twitter.com/36FrkeoMGz — Brad Mills ⚡️ (@bradmillscan) May 11, 2018 This piedpipercoin situation shows the popularity of the TV show - with enough people interested in an actual token inspired by Silicon Valley. There's no doubt that there will be more of a spotlight on this airdropped token in the coming weeks. […]

Tether minted $250 million worth of new USDT tokens May 18, with both the markets and the community reacting strongly. The controversial stablecoin Tether generated $250 million worth of new USDT tokens on May 18, according to Omni Explorer. Tether is the company that issues the so-called stablecoins USDT, which it claims are backed at 1:1 ratio by US dollars. Tether has been criticized for its lack of transparency after it broke ties with auditing firm Friedman LLP before an official audit could be conducted. With a near monopoly on stablecoins, the total supply of Tether tokens has now risen to 2.5 bln, and some critics find it hard to believe that all of those tokens are backed by US dollars. One such critic is anonymous blogger Bitfinex’ed, who has pointed out the correlation of Tether coin generation with price increases of mainstream cryptocurrencies like Bitcoin and Ethereum. According to Cointelegraph’s BTC and ETH price indices, the price of Bitcoin increased approximately by $120 and Ethereum by $10 within an hour of the issuing of the $250 million worth of new Tether tokens. Bitfinex, one of the largest exchanges for cryptocurrencies, is a sister company of Tether and has threatened legal action against critics such as Bitfinex’ed for questioning Tether’s 1:1 ratio with USD, a fact still unproven in the absence of an audit. Tether might not be the only contender in the stablecoin sphere, as new players like Circle, backed by Goldman Sachs, TrueUSD, and Basis have begun developing their own stablecoins. […]

Even with crypto market prices falling this week, scores of companies and government globally have signed on to using blockchain. Top Stories This Week Circle Partners With Bitmain For Planned Release Of USD-Backed Stable Coin Circle Internet Financial Ltd. has finished a $110 mln investment round with led by Chinese mining hardware manufacturer Bitmain as part of their project to create a US-dollar backed stable coin. The Circle USD Coin, which will function as an ERC-20 token on the Ethereum network, will reportedly be integrated into the Circle Pay payment app and in Circle Trade, as well as traded on the Poloniex exchange. Microsoft’s Bing Joins Facebook, Twitter In Crypto Ad Ban Search engine Bing will be blocking crypto-related advertisements by July 2018, citing crypto’s lack of regulation as causing too much “risk” for Bing users. The news may have led to the end of the week’s crypto market drop that brought BTC below $8,000 and ETH below $700.   Bitcoin’s Network To Use 0.5% Of World’s Energy By Year’s End The first peer-reviewed research on the amount of energy used by Bitcoin mining shows that it could end up using around 0.5% of the world’s energy by the end of 2018. The Bitcoin network already uses almost as much electricity as Ireland, and the article predicts that it could soon be using as much energy as Austria. A solution to this “big problem” is--according to the economist behind the research--the Lightning Network, but it only “may” help the situation. China’s IT Ministry Ranks Ethereum Number One In New Crypto Rankings China’s Ministry of Industry and Information Technology has ranked Bitcoin 13th and Ethereum 1st out of a 28 place list of cryptocurrency rankings. According to the ranking requirements, Bitcoin is lacking in “technology” and “application,” even though it was ranked higher than the other 28 coins in “innovation.” Some Twitter commentators are confused about these classifications: Drug abuse on chinese Ministry of Industry &IT must be a problem. — José Antonio Bravo ⚡️ (@jabravo) May 17, 2018 Amazon Partners With ETH-Based Startup For Simplified Blockchain Cloud Platforms Amazon Web Services and ConsenSys’s blockchain startup Kaleido have partnered to offer simplified blockchain cloud platforms. Amazon’s partnership with Kaleido, which is based on the Ethereum blockchain, was described by Ethereum co-founder and ConsenSys founder as “a heavy duty, full stack way of getting the company [Amazon] into blockchain solutions.” Quotes of the week “As a China company, we have to be prepared,” — Bitmain co-chief executive Jihan Wu on their turn to AI. “To create a country? It is absolutely absurd to fabricate such a story,” — Binance co-founder He Yi on the false rumors of Binance’s creation of a crypto paradisal kingdom Laws And Taxes EU Passes Legislation To Strengthen AML Regulations Regarding Crypto The European Union’s new anti-money laundering legislation will specifically target the anonymity of cryptocurrencies, meaning that EU-based crypto exchanges will most likely have to follow AML guidelines such as full customer verification. Florida County To Begin Accepting Crypto For Various Government Services Seminole County in Florida will be accepting Bitcoin and Bitcoin Cash through blockchain payments service BitPay for property taxes, driver license and ID card fees, and tags and titles starting this summer. The move to crypto reportedly comes from a desire to avoid the risks like fraud and identity theft connected with credit card usage. Thailand Releases Long-Awaited Crypto Regulatory Framework Thailand’s regulatory crypto framework has come into effect this week, defining cryptocurrencies as “digital assets and digital tokens,” with the Thai Finance Minister confirming a broad support of ICOs as long as they are regulated. Digital assets will now fall under the regulatory jurisdiction of the Thai Security Exchange Commission under the provisions of the new measures. Ukraine Releases Draft Regulations For Crypto, Asks For Citizens’ Opinions Ukraine has prepared draft legislation that will legalize cryptocurrencies, but a member of the Ukrainian parliament has posted on FB asking for citizen feedback on the regulation first. The legislation aims to build a “free and transparent” digital asset market in the country, also advocating for digital ledger technology use in the public sphere. Adoption European Bank Santander Runs Blockchain Investor Voting Pilot Spain-based bank Santander has successfully used blockchain technology for investor voting, with JPMorgan and Northern Trust participating as custodian banks. HTC To Launch First Blockchain-Powered Android Phone Electronic corporation HTC has released plans for the “first native blockchain phone”--the HTC Exodus--which will support the Bitcoin, Ethereum, Lightning Network, and Dfinity blockchain protocols. The phone will also reportedly contain a universal crypto wallet and a “secure hardware enclave.” World’s Fifth Largest Bank Announces Future Cryptocurrency Trial The banking unit of Japan’s Mitsubishi UFJ Financial Group--the fifth largest bank in the world--announced plans to trial its own cryptocurrency by 2019. The MUFG Coin, one of which will equal one yen, will be able to be used on an app that can convert deposits to fiat, as well as for payments in restaurants and shops. Privately-Own Taipei Bank Releases Blockchain Payment System Taipei Fubon Commercial Bank has deployed a blockchain-based payment system for restaurants and merchants near the National Chengchi University in a reported first for Taiwan. The blockchain payment application is run on the Ethereum network and uses the Istanbul Byzantine Fault Tolerant consensus protocol to reduce both payment times and transaction cost. LedgerX Launches Bitcoin Savings Product Licensed by US’s CFTC Trading and clearing platform LedgerX’s new Bitcoin savings account is licensed by the US Commodities Future Trading Commission (CFTC). The licensing means that investors can earn a fiat-based yield on their Bitcoin holdings by putting BTC into a LedgerX account, then selling a call option at a somewhat longer date with a higher strike call option. Mergers And Acquisitions IBM Partners With Crypto Startup To Release Environmentally-Based Tokens IBM and crypto company Veridium Labs have partnered to tokenize carbon credits for use on Stellar’s blockchain. The aim of these now digital carbon credit tokens is to eventually reduce a company’s carbon emissions by allowing them to better track their carbon footprint through blockchain. CME Group, Digital Asset Exchange Release Ether-Dollar Reference Rate, Index CME Group has partnered with UK digital asset exchange Crypto Facilities in order to launch the CME CF Ether-Dollar Reference Rate and Real Time Index, providing a standardized rate and index based on order book activity from exchanges Bitstamp and Kraken. Crypto Exchange To Open Using Nasdaq Tech For First Time Centralized crypto exchange DX will open next month using US stock market giant Nasdaq’s technology. The exchange, referred to as a “one-stop-shop” for fiat and crypto services by its CEO, will open trading with the market’s top six cryptocurrencies but has plans to add up to 25 more. Bermuda, Shyft Sign MOU For Blockchain Economic Development Bermuda’s government has signed a Memorandum of Understanding (MOU) with the Shyft network, which will spend up to $10 mln on blockchain technology education and economic development in the country. The Shyft network will also collaborate on developing a crypto regulatory framework with the government. Largest Credit Bureau In Central, Eastern Europe To Use Blockchain For Customer Data The Polish Credit Office (BIK), the largest credit bureau in Central and Eastern Europe, has partnered with UK fintech firm Billon for blockchain use for customer data storage. BIK reportedly tracks around 140 mln credit histories, and has been working with Billion since 2017 for piloting blockchain architecture with eight Polish banks. Winners and losers The crypto markets have seen a slump this week, with none of the predicted rallies in the wake of the recent NYC crypto conference coming through as expected. Bitcoin is nearing $8,000, Ethereum dipped below $700, and total market cap around $382 bln at week’s close. Top three altcoin gainers of the week: Bitcoin Diamond (12.89 percent) Cortex (12.33 percent) Zilliqa (11.09 percent) Top three altcoin losers of the week: Huobi Token (-19.07 percent) Binance Coin (-7.68 percent) Popolous (-4.42 percent) For more info on crypto prices, make sure to read Cointelegraph’s market analysis. FUD Of The Week Another South Korean Financial Regulator Joins Crypto Exchange Probe South Korea’s Financial Services Commission has joined the country’s probe into crypto exchanges this week, expanding the reach of the investigation into anti-money laundering already led by the Financial Supervisory Service. Co-founders Of Celebrity-Backed ICO Indicted For Fraud The three co-founders of Centra Tech--the ICO backed by American boxer Floyd Mayweather and celebrity DJ Khaled--have been indicted for securities fraud, wire fraud, and two conspiracy counts. Almost 1/5 Of ICOs Examined In Wall Street Journal Study Raise ‘Red Flags’ The Wall Street Journal released a report this week that showed that 18.6% of the 1450 examined ICOs used “deceptive or even fraudulent tactics.” The amount of money lost in total is an estimated $273 mln. Poland Continues Anti-Crypto Online Media Campaign Polish Financial Supervision Authority has posted a tender order online, offering about $173,000 dollars to the company which can conduct a campaign on the risks associated with cryptocurrencies. This move comes after this February’s reveal of a secretly funded YouTube video--“I LOST ALL THE MONEY?!”--about a man who loses all his money due to crypto investments and is subsequently humiliated on a date. Prediction Of The Week Apple Co-Founder Sees Blockchain, Crypto Reaching Full Potential In A Decade Although Apple co-founder Steve “Woz” Wozniak has sold all of his Bitcoin (except one!) due to a self-professed anxiety about constantly watching market prices, he remains bullish on blockchain and crypto, referring to the tech this week as the “next major IT revolution that is about to happen.” Best Features Why Blockchain Is Hard Bitcoin developer Jimmy Song breaks down why every company should make sure blockchain is the right tool for them first before jumping on the blockchain train--”the faster we get rid of the hype, the better off long-term we’ll all be.” Even Snoop Dogg Got In On NYC's Blockchain Week See how many blockchain parties Snoop Dogg managed to hit up this week. […]