Ripple and Intermex in a Project to Facilitate Cross-Border Payments between the US and Mexico

Maria Rodríguez
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Ripple and Intermex in a Project to Facilitate Cross-Border Payments between the US and Mexico

As part of a commercial alliance between Ripple and Intermex, a series of solutions could be enabled to help send remittances and international financial operations between the United States and Mexico.

Recently, the executives of Ripple, one of the startup companies with the third most commercial cryptocurrency in the world, announced the intention of strengthening the relationship with their clients in Mexico and develop solutions to cross-border payments between the United States of America and said Latin American country.

As part of Ripple’s plans, the company achieved an alliance with the International Money Express company, also known as Intermex, to make possible this remittance option. Intermex is known for being one of the companies dedicated to sending remittances. The services they provide manage to be one of the most important and used in Latin America and the Caribbean.

For this market strategy, the company that focuses its services on South American users is listed on the Nasdaq stock market.

According to information recently revealed, the alliance will help the Intermex platform to use Ripple’s liquidity on demand (ODL) service, using, in this way, the payment network of the cryptographic company. RippleNet is a network that manages to interconnect several financial institutions.

The ODL is a support system designed by Ripple to use the XRP cryptocurrency as a real-time channel to receive and send payments with coins. This method makes possible cross-border financial operations to be carried out quickly and inexpensively.

Ripple Explores the Remittances Market as an Important Option

The remittance market has become an important source of business today where not only the fiat money has “had a life”, but also that the cryptocurrencies have been made with an important part of the market for its ease in the cheap and instant sending of the money.

Using cryptocurrencies, such as the one of Ripple to send remittances, is an option that avoids using intermediaries to conduct the transaction, making it safer. Undoubtedly, this new form of operating also avoids the payment of commissions for making international payments, saving considerably the sending of money.

In this way, Ripple has become one of the leading companies that have focused on facilitating the sending of remittances, thus supporting a market that results to be broad and dynamic, thanks to this technology.

In concrete data, the CEO of MoneyGram, Alex Holmes, explained, in November 2019, that more than 10% of remittances sent between the United States and Mexico are using Ripple ODL. This supposes an unquestionable and important presence in the market of remittance.

It is important to clarify that Ripple has begun to gain more strength in the remittance market between Mexico and the United States, as part of a strategy that seeks to increase its services in the largest cross-border shipping market in the world, a very important opportunity for Ripple, blockchain and all the cryptocurrencies to make safer and faster operations for their users.

By María Rodríguez

Around 7.5 Million Spaniards Own Bitcoin and Other Cryptocurrencies, According to Study

Alexander Salazar
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The figure would represent 16% of the population, estimated at 46.9 million inhabitants. The study concludes that cryptocurrencies still have a way to go to compete with cash.

The Center for the Governance of Change at Spain’s IE University did a research study in which it was estimated that 7.5 million Spaniards already own Bitcoin and other cryptocurrencies.

In the study, which is entitled “Cryptocurrencies and the future of money”, it was noted that 81.7% of Spaniards already know about cryptocurrencies, but that only 16% of the population, estimated at 46.9 million inhabitants, would own some of them.

Regarding the reasons why Spaniards would be buying Bitcoin and other cryptocurrencies, 60% of the holders said that they consider them an investment mechanism, another 12.8% use them to make purchases, while 27.2% employ them for both purposes.

On the other side are the reasons why even millions of people do not acquire cryptocurrencies. First of all, about 37.9% consider them to be risky. However, it is noteworthy that the second important reason is that about 35.3% of the population does not know how to buy them, which is an important segment of citizens that need to learn more about how to proceed. The other reasons for not acquiring them include not seeing their advantages over fiat money (24.9%) or usefulness for making purchases (19.8%).

Types of Cryptocurrency Users

Even though the report does not provide details about the methodology or the duration of the research process, it indicates that it was based on surveys of Spanish residents. Concerning the type of Spanish citizens who have cryptocurrencies, about 51% of them would be between 18 and 34 years old with a high annual income, which would range between 100,000 and over 500,000 euros.

Another prominent aspect of the research is that the interviewees were asked if they would be willing to use a cryptocurrency issued by a private company or groups of associated companies, and not by a central bank that directs its use. It should be noted that 49% of the participants said that they would use them if the cryptocurrency was “well designed” and efficient and if it maintained a stable value over time.

After last year’s announcement by Facebook to launch its stablecoin Libra in 2020, the researchers wanted to know if the Spanish would trust this company to issue a cryptocurrency under a private blockchain. In this section, 87% of the respondents admitted to not trusting Facebook to promote a cryptocurrency of this type.

It could be said that the refusal is linked to the scandal over the handling of data from Facebook and the users of its social network. This case activated alarms on a global scale about the correct use of people’s digital information.

Despite the progress, the study concludes that there is still much to do in the field of cryptocurrencies in Spain. In this way, the researchers summarize the scenario that they predict for Bitcoin in this European country.

By Alexander Salazar

Reasons Why MasterCard CEO Abandoned Facebook’s Project Libra

Alexander Salazar
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Reasons Why MasterCard CEO Abandoned Facebook’s Project Libra

Ajay Banga questioned Facebook and said that he did not understand how to make money with cryptocurrency. The executive criticized the idea of ​​creating the Calibra wallet and said that he did not like it.

The CEO of the MasterCard Corporation, Ajay Banga, censured Facebook and his cryptocurrency project Libra by saying that he did not understand how the money would be made with it and that the creation of the Calibra wallet was not in line with the proposal to promote a currency of global reach.

About four months after MasterCard withdrew from the Libra Association, a conglomerate of companies supporting the Facebook initiative, the Indian executive questioned the events that occurred after the group was formed and he said that the regulatory issue and the business model influenced the decision of the multinational company to step aside.

According to The Financial Times, Banga noted that the members of the association would not commit to doing something that did not fully comply with local laws and cited measures such as Meet Your Customer (KYC), Anti-Money Laundering (AML) and data management. Banga stated that he had directly asked the major promoters of Libra if all these aspects would be established in writing and he said that they would not.

Regarding the project’s profitability, Banga argued that not understanding how income would be generated, the work would be done in a way that he would not like, which accelerated his abandonment of the project. Although the CEO’s reasons are significant, there was an additional element that activated his alarms about the project’s viability. It is about the creation of the Calibra wallet, a project that would be used to manage the participants’ funds.

Banga indicated that this proposal had gone from an altruistic idea (of creating a global currency) to its own wallet and said that he did not like it. Banga said that to really promote financial inclusion, it is necessary to offer instruments that can be understood and used to buy different products, so he added that did not understand how that worked.

Data Management

The reasons that led MasterCard to withdraw from the Libra Association could also be based on the integrity and data management of the participants. This is due to the scandal triggered by Facebook and the company Cambridge Analytica for the bad data management practices by 87 million users of the social network, which could be considered as one of the largest episodes of violation of user privacy to date.

With this background, and after questioning some of the main decisions that were made, not only Mastercard stepped aside. Other companies such as Visa, eBay and PayPal, among others, have said that, at that moment, they were withdrawing from the Libra project to concentrate on other business models.

It should be noted that it is not the first time that Banga has referred to Bitcoin or cryptocurrencies in general. In October 2017, the executive said that cryptocurrencies not created by governments were trash, but would support government initiatives to create new state-controlled payment mechanisms.

By Alexander Salazar

Operations under FinTech Law Started at Subsidiary of Bitso in Mexico

Alexander Salazar
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Operations under FinTech Law Started at Subsidiary of Bitso in Mexico

NVIO has a deadline of six months to begin operations or its license can be revoked. The registration of a subsidiary corresponds to Bitso’s plans to adapt to the regulation.

Last January 22nd, the firm NVIO, a subsidiary of the Mexican cryptocurrency exchange Bitso, became the first financial institution to obtain permission from the National Banking and Securities Commission (CNBV) to provide services in the Spanish-speaking country as an Electronic Payment Funds institution under the supervision of the Law to Regulate Financial Technology Institutions (FinTech Law). This company is among the other 84 that have submitted the requirements for their legal registration, whose deadline expired on September 26th, 2019.

It was officially announced that CNBV had granted authorization to operate in Mexico to NVIO Pagos Mexico, a company that complied with the legal, financial and operational requirements demanded in the framework of the implementation of the FinTech Law. Besides, the company must begin its authorized operations within six months after the date of publication of the announcement (January 22nd, 2020) or its license can be revoked.

NVIO Pagos México must also prove to CNBV, at least within the next 30 business days before starting its operations, that it is duly constituted as a Mexican legal entity that meets the minimum capital requirements. Likewise, it must demonstrate that it has a board of directors, management composition, the required technological infrastructure, and adequate internal controls, as well as all the policies and manuals required by the FinTech legislation.

The authorization allows the startup to issue, trade or manage electronic payment funds, provide money transmission services from Mexico abroad, obtain loans and credits from third parties, issue securities on its own as shares, stocks, and obligations, as well as receive or deliver amounts of cash, among others. CNBV, jointly with the Bank of Mexico and Condusef, is the institution that will be in charge of supervising compliance with the FinTech Law and imposing fines in the case that the legislation is broken.

The FinTech Law, which entered into force in March last year in Mexico, is a legal instrument including not only cryptocurrency exchanges but also collective financing companies, payment and remittance funds, and even banks.

Bitso’s Plan

Apart from being requested to enter the regulatory framework, cryptocurrency exchanges have been forced to modify their operational processes. Otherwise, they would have risked not being in under the legal framework in force in Mexico.

Emilio Rivero, the company’s senior risk and corporate affairs analyst, said that Bitso had adapted to the regulation by separating its operations into two parts. In other words, as long as Mexican pesos are used, customers will continue using existing services such as the Interbank Electronic Payment System (SPEI), cash financing or Bitso Transfer. These services will remain under the operational supervision of the business name Bitso SAPI de CV, which is regulated by the FinTech Law of Mexico.

Rivero also explained that, regarding interactions with crypto assets, all of Bitso’s activities, including the custody, transmission, withdrawal, and trading of cryptocurrencies, were migrated to a jurisdiction outside Mexico. Since next August 1st, these operations will be under a framework specifically developed to regulate business in the cryptocurrency sector of the Gibraltar Financial Services Commission (GFSC).

These movements are part of Bitso’s strategy to adapt to the rules issued by the Central Bank of Mexico (Banxico), which prohibit financial technology institutions (FTI) or credit institutions (CI) to offer the general public operations with cryptocurrencies.

By Alexander Salazar

Expert Says that New Technology Will Not Ensure Digital Asset Privacy

Alexander Salazar
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Expert Says that New Technology Will Not Ensure Digital Asset Privacy

According to the market analyst known as “Bitcoin Jack”, the new “Schnorr Signatures” technology that will be implemented in the Bitcoin network will not bring total privacy to digital assets.

Whilst most people are focused on the halving event that will reduce Bitcoin miners’ reward, some are already studying one of the next innovations in the digital asset network: privacy.

“Schnorr Signatures” will be implemented in the Bitcoin network to give more privacy to the digital asset. Andreas Antonopoulos considers that this technology is better because of its peculiarities regarding the way mathematics develops.

The Bitcoin expert explained that how digital signatures are calculated can be verified without actually revealing the private key. In other words, it can be confirmed that someone owned the private key when doing the signature, said Antonopoulos.

A digital signature algorithm is a mathematical function that provides a number resulting from the application of the private key to a message. Consequently, anyone can verify that a user owns the private key without really having to know it.

Pieter Wuille, from Blockstream, announced last January 23rd that the final proposal to implement the new technology was published. The developer explained that these documents seek to integrate Schnorr and Taproot into Bitcoin. He said that it depends on users if the ecosystem accepts it and how.

The market analyst known as “Bitcoin Jack” also shared his opinion on the matter by stating that the Schnorr encryption scheme would allow improvements in the Bitcoin protocol such as block space efficiency, slightly higher levels of privacy and better security.

However, he said that the new technique will not make Bitcoin transactions private as Bitcoin is open. He noted that certain protocols, created based on the Bitcoin protocol, offer some kind of obfuscation of transactions, but they are second-layer solutions to a problem that should be solved natively.

Whilst stressing that Schnorr would not make Bitcoin private, “Jack” said that the technique will ensure that transactions will occupy less space on the blockchain, thus allowing more transactions to be processed and even fees to be reduced.

Brian Armstrong predicted that the 20s will witness the normalization of a private currency. The analyst also clarified that the Schnorr technique would introduce several improvements. However, it will not implement the fungibility feature for privacy in Bitcoin.

The expert believes that, with its full adoption, it will be possible to save up to 25% of space and, therefore, increase the transfer rate and reduce fees. He also assured that it will mask the types of transactions, thus effectively protecting the public keys involved.

Armstrong stated that the Schnorr technique will create an improved “privacy” layer, hiding some transaction information, which will make the chain faster and less transparent. Multi-digit transactions are among those that will be protected.

Throughout the years, Bitcoin has gained new functionalities and the network has increasingly developed, of which Lightning Network is probably the best example.

According to Samson Mow, Lightning Network can already process more transactions than competitors such as Visa and AliPay.

By Alexander Salazar

Hackers Stole Data of 5 US Law Firms and Demand Crypto Ransoms

Maria Rodríguez
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Hackers Stole Data of 5 US Law Firms and Demand Crypto Ransoms

Analysts consider that ransoms demanded by hackers affect the reputation of cryptocurrencies

Hackers stole encrypted data of 5 Law Firms of the United States and now demand 100 bitcoins (BTC), over $933,000, ransoms from each firm. These hackers ask for the money to restore access to the data and delete the copy of the information instead of selling it.

Two of the five law firms were hacked in less than 24 hours. The group of hackers responsible for that crime is known as Maze. According to the cybersecurity firm Emsisoft, the hackers started publishing part of the data stolen from the five US law firms.

The hackers also published the data on two websites. The Maze group names the hacked companies on its website and, if they do not pay, Maze publishes a small part of the stolen data as proof they have the information.

Maze keeps releasing increasingly sensitive parts of the data over time if the law firms do not pay. When a firm pays, the group removes its name from the website.

Brett Callow, a threat analyst from Emsisoft, said that “the group has also published data in Russian hacker forums with a note which said ‘use this information in any nefarious ways that you want’”.

Because of this, the expert believes that more data will be published unless the hacked firms pay. He also explained that, probably, the hackers won’t delete the information even if the law firms pay.

“It seems highly unlikely that a criminal enterprise would delete what it may be able to monetize at a later date”, Callow commented.

Modus Operandi

Callow explained that ransomware groups started stealing data at the end of 2019. Now, cybercriminals are also threatening the victims. The hackers say they will publish the data to extort payment.

He said that “the groups have stolen and published data from law firms (including client information), accounting firms (including client info), medical practices and medical testing labs (including patient info) and insurance companies”.

Callow also gave his opinion regarding the ransomware economy. He explained that Emsisoft had over 200,000 ransomware submissions last year.

For this reason, he estimates that Emsisoft has 25 % of the total ransomware cases, which means almost 800,000 cases of this type in 2019. The average demand is now over $80,000, so the total ransom demanded last year according to his estimates added up to $64 billion.

Finally, Callow explained that as ransomware started stealing particularly sensitive data, it is “likely to result in more legal actions being taken against ransomware groups, web hosts, and currency exchanges”.

The expert also said: “Legal actions such as these, as well as the fact that the incidents result in very sensitive data being exposed, is likely to raise the profile of ransomware cases. In turn, that could result in the public thinking cryptocurrency is ‘just for criminals’, making it harder for crypto to become more mainstream”.

A Texas-based data center provider considers that these rescues remain the main threat to cybersecurity.

By María Rodríguez

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