The United States regulates BitGo, which offers custody to 300 companies. If PayPal completed the purchase, it would become the custodian of the WBTC token.

PayPal had been avoiding getting involved in the Bitcoin market for years, but it now seems to have taken a turn in its business strategy. It has not only announced that it would offer support for various cryptocurrencies on its platform. There are also rumors that it is exploring the purchase of various companies in the ecosystem, highlighting the Bitcoin custody giant BitGo.

The executives of the digital payment company have had conversations with the custodian of cryptocurrencies of companies. The latter included Japanese Bank SBI Holdings and the Bitstamp exchange among three hundred other companies.

Anonymous sources kept the figure that PayPal offered to the service of cryptocurrency custody for institutions a secret. In 2018, BitGo raised around USD 58.5 million at a valuation of USD 170 million. There were also investments from Goldman Sachs and Digital Currency Group (the organization behind the institution with the most bitcoins under its charge, Grayscale Investments). For those reasons, the figure that PayPal offered should not be lower.

The representatives of both companies refused to make comments about the subject. Besides, there is still a possibility that PayPal may choose another company or that BitGo will reject the acquisition. PayPal is certainly not wasting time on its cryptocurrency strategy.

The path that the custodian has followed since its foundation in 2013 until today places it as one of the most successful. For example, it already has permits as a custodian for South Dakota. However, it is currently awaiting a response from New York regulators, after having applied to become an independent custodian under the banking laws of the US financial capital. Besides, it already has support to comply with the so-called Travel Rule proposed by the Financial Action Task Force, which adds to its regulatory alignment.

PayPal will remain as the exclusive custodian of the cryptocurrencies purchased on its platform, without giving its users control over private keys or allowing them to withdraw funds. For that reason, it makes sense that it is looking to partner with an already established company with security technology tested in the wild. This is especially true now that its paperwork is already in progress to establish itself as a financial institution in New York.

BitGo is also the main custodian of Wrapped BTC, the first tokenized version of Bitcoin on the Ethereum blockchain. The acquisition by PayPal could also include control over the asset pegged to the Bitcoin price, mostly used for investments in the DeFi market. Furthermore, its partnership with Paxos indicates that PayPal intends to fully immerse itself into the cryptocurrency ecosystem.

The importance of Bitcoin worldwide has grown dramatically in the last few years. The people behind PayPal have realized the importance of incorporating the pioneering cryptocurrency into this payment service. The acquisition of BitGO would allow them to operate with Bitcoin and other cryptocurrencies, giving users more payment options.

By Alexander Salazar

The platform allows registering scores of music, videos, articles, essays, and images. Ten million digital works have been registered a day on the network, says Ant Group.

Ant Group, the financial subsidiary of one of the world’s largest trading companies, Alibaba, this week introduced its new copyright service for content creators in China.

The app will allow the recording of music scores, videos, images, articles, and even essays to protect the intellectual property of its creators, as described when it was patented in the middle of the year.

This service will work thanks to the blockchain network of the Alibaba conglomerate, known as AntChain, which launched its software and hardware months ago.

In the recent statement, Ant Group notes that its platform is helpful when it comes to verify and protect the copyright of all work registered in its database. Users only have to upload their content to the network, which gets evaluated to confirm that it is the only one of its kind within the AntChain archives.

If so, the platform generates an intellectual property certificate with the basic information that the registered work contains. The idea is to generate a kind of digitized notarial seal; this can then be used as evidence before the courts. “(The certificate) can be presented as evidence in cases of copyright infringement or torts,” the document specifies.

AntChain is already in the music industry

In addition to all this, the platform will provide services to monitor possible infringements of the copyright of its users, making it easier to find and identify plagiarism. AntChain also offers a smart contract function to record the income of the author and the distributors, thus accounting for how much each one has. This is one of the services provided to the company Shanghai C.C. Music Co. Ltd, one of the leading music sheets and music copyright distribution networks in China.

The company became one of the first Ant Group partners to develop this project, eventually testing the platform during its trial period. Currently, both companies continue to work together for this service, accounting for more than 10 million original works registered per day on their digital network.

In 2020, the Alibaba Company and its branches became one of the multinationals with the largest number of patents related to blockchain. The company enjoys enormous prestige with its payment service, Alipay, which is the most widely used in China. Everything indicates that the giant of commerce and digital payments also wants to venture into the blockchain ecosystem and that a large part of its bet is in the variety of services it can offer with AntChain.

By: Jenson Nuñez.

Users with an account at Hodl Hodl already have access to the new product. Hodl Hodl limits concurrent loan agreements to 10 per user.

The peer-to-peer (P2P) bitcoin (BTC) exchange Hodl Hodl launched a new platform that allows users to request and offer loans with collateral in bitcoin, inspired by “the main advantages of DeFi (decentralized finance) projects: no custody, no fiat money nor personal data with KYC (Know Your Customer or Meet your client).

Through a press release, Hodl Hodl reported that the service is available to its users from this Thursday, October 22. This platform, called Lend at Hodl Hodl, seeks to “combine the best features in both DeFi and Bitcoin loan spaces,” the text states.

With the new tool, Hodl Hodl users will gain access loans in stablecoins tether (USDT), USD Coin (USDC), DAI, and Paxos (PAX) by placing BTC as collateral. The motto is not to sell the bitcoins but to keep them in a contract between the parties and get them back once they pay the loan.

According to Hodl Hodl, the use of stablecoins instead of fiat money gives anyone in the world the chance to start businesses. “There are no borders. By eradicating fiat money, we also erase borders. Now everyone can lend money to everyone, and everyone can borrow from everyone, “they say in their statement.

Being a peer-to-peer trading platform, it is up to each merchant to define the parameters of each offer, either to lend or to request a loan. That means that each person defines the correlation between the loan and its collateral, in addition to the interest on the loan and the period of validity as well as the settlement. That period can range from 1 day to 12 months in total.

As with its exchange platform, Hodl Hodl implements the use of multi-signature contracts to protect the parties without withholding anyone’s funds. Once both parties confirm the loan payment, the funds get free to the user who placed them as collateral.

Max Kei, CEO of Hodl Hodl, assured that the multi-signature deposit mechanism implemented in his platform is “an ace up our sleeve that we believe will bring much more value in the future.”

Likewise, he considered that the launch of this loan tool represents “a great step towards decentralized finance,” cites the company’s press release.

Fees and maximum of loans with collateral in Bitcoin

Beyond the negotiations being direct with other people, Hodl Hodl establishes a limit to the number of loans that each user can open: a maximum of 10 at a time. This limit applies only to loans taken, while each user can lend as many times as they want.

Users who have an account at Hodl Hodl now have access to the loan service without the need to create a new additional account.

For each contract, the platform charges a commission of 1% of the total loan amount. This commission is added to the collateral deposited in the guarantee and is deducted by Hodl Hodl at the time of the release of funds after the loan is paid off.

Launched in 2018, Hodl Hodl focused since the very beginning on offering a platform that, in addition to not guarding the funds of its users, respects their privacy and anonymity. The latter reinforce happened at the end of March this year when they eliminated the option to verify accounts on the platform with KYC.

On the other hand, last September, the exchange platform would allow the transfer of funds from BTC to Dollar on Chain (DoC), a currency anchored to the dollar that runs on the protocol for smart contracts in Bitcoin, RSK.

By: Jenson Nuñez.

Since October 20^th, the size of the mempool has maintained a clear correlation with the price. The fees on Bitcoin have been at their highest level in the last two months.

In recent days, congestion on Bitcoin (BTC) reached levels not seen in 20 days. The mempool shows a growing trend of unconfirmed transactions since October 20^th, along with a price that reached USD 12,000 that day.

The following day, the mempool had a considerable increase, going from 14,486 MB to 45,484 MB. That same day, Paypal announced the incorporation of Bitcoin and other cryptocurrencies into its platform and boosted the price up to USD 13,161.

The mempool is the temporary memory that stores transactions pending confirmation. On October 21^st, it reached a weight of 45.8 MB and over 70 thousand unconfirmed transactions.

The increase in the mempool may imply that a greater number of users are conducting transactions. The fear of missing out (FOMO) could be leading many new investors to enter Bitcoin by speculating that recent news could push its price higher.

It is important to note that the correlation between the mempool and the price of Bitcoin is not constant. In the period between February 19^th and March 13^th, when the price of Bitcoin lost 60%, the correlation between the size of the BTC mempool and the price of the cryptocurrency was negative by 41.2%. In 2016, that correlation was -83.1%.

Growth of Fees on Bitcoin

The correlation between the mempool and the fees that users pay for transactions in Bitcoin is what may be a usual constant. The network’s congestion encourages higher transaction fees to get priority and receive the validation of miners.

The average fee on October 22^nd was USD 6.36, but it had been USD 1.46 just five days before. They are the largest values since August 6^th, when the average fee was USD 6.47.

Many wallets, Bitcoin custodians, and exchanges do not support SegWit, which contributes to the increase in fees. The same occurs with those that offer high fees by default.

Checking the current trading volume on the network is one way to avoid paying high fees. Various online tools, including BitcoinFees.earn.com and mempool.space, allow users to do this.  Besides, it is necessary to use wallets with the flexibility to customize fees.

Another strategy is to implement the use of solutions in payment channels such as the Lightning Network, which is ideal for micro-payments.

Some months ago, Daniel Alós, a collaborator at HodlHodl, started an educational campaign on this tool. He explained that “the possibility that there will be another Bitcoin bullish rally and on-chain transaction fees will soar” had driven him to do it.

The congestion of the Bitcoin network due to PayPal’s announcement is just one of the signs of the reputation of the cryptocurrency among users. The cryptocurrency has shown an extraordinary ability to overcome its worst all-time lows.

By Willmen Blanco

The 1944 agreement defined a new monetary system concerning the dollar.The current economic crisis would be raising a new agreement, says the IMF.

The executive director of the International Monetary Fund (IMF) Kristalina Georgieva said that the global health crisis and the growing economic problems place the world in a new “Bretton Woods moment”. Georgieva referred to the agreements that took place in July 1944, at Bretton Woods, New Hampshire, United States.

The IMF published Georgieva’s speech on October 15 in which he outlined an action plan based on three guidelines: The creation and execution of policies to address the growing public debt, targeting policies towards the people, and putting more efforts on climate change, targeting to zero CO2 emissions by 2050.

The reference to Bretton Woods provoked numerous reactions, most of them skeptical that a similar agreement could curb the record growth of debt that overwhelms the major economies of the world. The IMF recognizes the alarming levels of the increase in the debt of the countries as a result of the fiscal and monetary measures in response to the health crisis.

The 1944 agreements by 44 countries stabilized the exchange rates of world currencies against the US dollar, which in turn took gold as the main back-up. The price of gold, under the agreements, was about $ 35 an ounce.

Right now, Georgieva is speaking out for “strong medium-term frameworks for financial, monetary and fiscal policies” that can boost economic activity and competitiveness.

It is noticeable that the IMF puts the Bretton Woods agreements on the table, which achieve was very healthy at a moment when the United States possessed a strong economy in its favor, compared to those of the European countries that were directly facing the consequences of the Second World War. The majority of the world’s gold reserves also helped the US, pushing the dollar to consolidate as the world’s reserve currency.

The important agreements served as the basis for the creation of the IMF, which could theoretically help a country with loans if it entered an economic crisis. Bretton Woods also led to the creation of the International Bank for Reconstruction and Development (IBRD), which would later become the main agency of the World Bank.

Among those who criticized the agreement since its inception was the journalist Henry Hazlitt, who covered economic issues for the New York Times from 1936 to 1946, and was responsible for several editorials that harshly criticized the agreement. His articles are collected in the book From Bretton Woods to World Inflation, A Study of Causes and Consequences, published in 1984, and which is available on the Mises Institute website.

Hazlitt argued that the agreement relied on governments to maintain consistent monetary policies but that no guarantee would happen. He claimed that it was not a viable system, that it would produce inflation, and predicted that it would collapse over time.

Hazlitt had already anticipated the failure of the agreement in which the thesis of the United States, elaborated by the economist Harry Dexter White, was imposed on the proposal of the United Kingdom, led by the famous John Maynard Keynes. The economic hegemony of the United States was remarkable in 1944 but it was accentuated after the end of the world war when it became the provider of liquidity for the reconstruction of Europe.

An oversupply of dollars in international markets intensified in the 1960s due to various factors, including US aid to other countries, military spending, and the growth of foreign investment in the United States.

This was a move against the Bretton Woods agreement, mainly because the United States did not have enough gold to cover the volume of dollars if the rate of 35 dollars an ounce was maintained.

 Various measures by the Kennedy and Johnson administrations to maintain the dollar and the Bretton Woods agreements failed, as the perception that the dollar was overvalued was imposed. Fearing a devaluation of the dollar, traders of the Forex markets promoted periodic phases of strong dollar sales.

By: Jenson Nuñez.

The official maintains that there are other issues to resolve before thinking about the digital euro. It considers that it would be more appropriate to improve the existing payment systems.

Burkhard Balz, a member of the board of directors of the Central Bank of Germany, guaranteed that the development of the digital euro generates more questions than answers. This announcement saw light during his virtual speech at the Financial Summit between China and the European Union.

Balz explained that, despite their possible use cases, he sees several risks in these digital currencies (also known as CBDCs) among which the digital yuan stands out, which is in an advanced stage of development.

Besides, he also said that, unlike the Chinese ecosystem, some issues still need to be solved in the Eurosystem before the Central Bank decides to implement a digital euro. It is that, as explained, “Chinese payment behavior is already characterized by the strong use of innovative mobile payment methods.”

The risks of central bank digital currencies

Balz detailed some of the risks he sees in these types of currencies. Among some of them lays the possibility that its acquisition is available to foreigners. “It could result in a revaluation of the currency itself, but it can also generate fears about the monetary sovereignty itself being affected,” he said.

According to him, if digital currencies are implemented, “close and open cooperation between the world’s major economies” would be necessary, so that fears like this do not harm national economies.

Balz also referred to possible “digital bank runs.” “What would happen if, in times of crisis, bank deposits were quickly withdrawn and turned into a digital euro?” He asked himself and answered: “The result could be the destabilization of the entire financial system.”

To avoid this, Balz considers that tools will be there” to ensure that a digital euro is used primarily as a way of payment, but not as a store of value”. He added that “one option to investigate would be to allow users to hold digital euros only up to a threshold at any given time.”

As a final negative, Balz indicated that in case cash turns to be eliminated, some parts of society could suffer a complete exclusion from the financial system. Anyway, this would not be a problem if they follow the guidelines of the current president of the Central Bank of Europe. For her, the digital euro should not replace cash but rather complement it.

“Digital currencies are not a panacea”

Balz is no stranger to the benefits that digital currencies would provide to governments and banking institutions. As reported by CriptoNoticias, the direction in which the development of these types of currencies is progressing. It also aims to give the State greater control over how the inhabitants use their money. Its implementation seeks to reduce money laundering and tax evasion.

These bank currencies, although they share some characteristics with Bitcoin, would differ from this cryptocurrency in that they will not provide privacy to their users, they are not decentralized, and operations can be blocked with a court order.

In any case, the director of the German Central Bank considers that there are better alternative options to the creation of a digital euro. “Central bank digital currencies are just one of several non-exclusive options, some of which may be more obvious or easier to implement,” he explained.

Among these alternatives “without the possible undesirable implications” he mentions the possibility of improving conventional payment systems, both nationally and globally. “In this sense, we support the market in the development of a pan-European payment solution with the full deployment of the new instant payment infrastructure.”

By: Jenson Nuñez.