Central Bank of Chile Debates about Treatment to Cryptocurrencies

Maria Rodríguez
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Central Bank of Chile Debates about Treatment to Cryptocurrencies

New technologies and financial assets could minimize costs and overcome financial obstacles.

Mario Marcel, who is the Governor of the Central Bank of Chile, held some discussions about the appropriate policies that should be considered to apply to digital currencies.

Due to new open source technologies and the accelerated advancement of mobile telephony are causing a massive and rapid adoption in society, some financial services such as savings and loans, investments, payments, among others, have been seen.

In this way, the economic forum turns out to be an example of innovation for different types of financial services. The progress of FinTech had a special interest as it identifies and agglomerates the same innovation problems that financial services are having in all areas.

The main idea is that all these new technologies can be used if users understand the potential of innovation and find the exact way to apply it to new global financial services. In this sense, policy makers who are in charge that these new technologies can engage in the economy, should be aware of these issues and thus be able to assess the risks and benefits that new business models may bring in the future.

Mario Marcel understands these challenges; it is for this reason that he has expressed that the Central Bank of Chile has among its main plans the evaluation of disruptive technologies within the framework of the 2018-2022 Strategic Plan,  which carries out his office and evaluates all aspects of the new economic ecosystem.

It is for this reason that the Central Bank of that country has created two initiatives which seek to address these issues. The first one is the TechLab, and the second one is the Technological Observatory.

The last one, the Technological Observatory, is responsible for conducting research related to the new technologies connected to financial services in order to assess the risks and costs of policies that can bring the implementation of these advances, and strengthen cooperation among all the institutions responsible for using this type of technology.

The TechLab, meanwhile, is the sector that is responsible for the implementation of this technology, performing experimental stages in all economic processes. Among this tools are cryptocurrencies, Artificial Intelligence (AI), etc.

It is known that they are currently experimenting with learning techniques and blockchain technology. The TechLab results to be one of the newest sectors to operate, so it is experimenting with API technologies in just three months since it started its activities. The central conclusion discussed during the debates is the use of blockchain technology and alternative technologies as a positive, but risky option, due to the high impact it may have on the economic and political sphere. However, it was emphasized, as it is known, the knowledge and benefits that cryptocurrencies and blockchain technology can bring are important for the Central Bank of Chile.

About this aspect, members of the bank discussed the large number of migrants who arrive in Chilean lands and use national financial services to send remittances abroad, so they face high financial costs in the capital leakage.

For this reason, a possible solution would be the use of cryptocurrencies to send remittances abroad, which turns out to be cheaper and faster, but with significant risks for the shipment and receptivity of the asset.

Finally, the investigation of these areas could benefit in a positive way in citizens’ economy if the bank manages to effectively apply a platform supervised by the government.

By María Rodríguez

Malaysian Ministry of Education Will Avoid False Degrees Using Blockchain

Maria Rodríguez
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Malaysian Ministry of Education Will Avoid False Degrees Using Blockchain

The E-Skrol blockchain will be available in more universities to verify and protect the identity of graduates. The App is based in the NEM blockchain.

All public and private universities in Malaysia will have access to an application to prevent certificate fraud, thanks to blockchain technology.

The name of the application is E-Skrol and it is based on the NEM blockchain, a cryptocurrency and data management platform.

Recently, the Malaysian news agency Bernama published that the Ministry of Education informed that the E-Skrol blockchain will be available to more universities. This App will help verify the authenticity of Malaysian educational degrees.

“There are more people who cling to the reputation of Malaysian public universities to improve their professional profiles by showing fake certificates”, said Education Minister Maszlee Malik.

Numerous Cases

The goal of E-Skrol is to address the growing number of fake academic degree cases in Malaysia. One of the problems that this country faces is that the so-called “diploma factories” offer fake certificates online.

The falsification of academic degrees, according to Maszlee, has generated a negative impact on the Malaysian Higher Education system.

Therefore, from now on, anyone, anywhere in the world, can verify the data of any graduate of a Malaysian university.

Among the data that can be verified is the name of the graduate, his complete academic record, the date of graduation and type of degree. This will be possible when scanning, through the application, a QR code that will be printed on each certificate.

Looking for Foreign Professionals

Malaysia is a territory that has opened its doors to blockchain technology. Last June, this country launched a work visa program aimed at anyone in the world who has knowledge about blockchain technology.

The objective of the new program is to attract foreign professionals who can generate new developments in the area by investigating new and current uses of blockchain technology. The central idea is to take full advantage of this technology.

Foreigners, who take the offer, will have the right to remain in the country for a maximum of 12 months in order to provide their services related to chains of blocks.

Other foreigners may stay for 12 months in a Malaysian company if what they are looking for is to acquire knowledge, instead of providing service or their knowledge.

The Vice President of Growth Ecosystem Development of the Malaysia Digital Economy Corporation (MDEC), Norhizam Abdul Kadir, gave more details about the project that has been prepared until now.

“We will start with blockchain. The number of work visas that we are going to issue will depend on the projects that will be conducted by Malaysian blockchain companies”, he said.

The program was launched by the government organization Malaysia Digital Economy Corporation (MDEC), the NEM Foundation and the jobbatical job platform.

In June, an advisory committee of the Malaysian government signed a memorandum of understanding with the South Korean blockchain laboratory IncuBlock for the development of blockchain technology.

 Also in June, the Malaysian Securities Commission registered new cryptocurrency exchanges so that they could operate in that region for the purchase, sale and storage of cryptocurrencies and other digital assets.

On January 15th, the Order on Capital Markets and Services definitively classified cryptocurrencies assecurities, so they entered the legal field and, since then, advances in regulation continue.

By María Rodríguez

Ethereum Stablecoin DAI Brought to Tron and Binance Blockchains

Willmen Blanco
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Ethereum Stablecoin DAI Brought to Tron and Binance Blockchains

DAI will initially be integrated into the Tron blockchain. Some users expressed their doubts about the consensus rules of this system on the social networks.

The DAI token, the value currency pegged to the US dollar price of the MakerDAO project will be available on multiple blockchains, according to Loom Network. The information was published on Thursday, September 19th, 2019 on the startup’s institutional blog.

Luke Zhang, one of the co-founders of the Loom Network, said that Maker will be the first third-party project to use Loom’s cross-chain gateways. He explained that the implementation of a gateway will allow DAI to exist in other first layer blockchains such as Tron and Binance Chain, which will significantly increase its user base.

DAI is a decentralized stablecoin (pegged currency), based on Ethereum, a part of the assets of the MakerDAO project. This decentralized finance (DeFi) product has been gaining popularity and its use has had a significant growth so far in 2019.

According to Zhang, Marker has almost USD 350 million in assets to generate DAI. However, because it is an ERC20 token, it is currently only available to Ethereum users, which would change with the implementation of the Loom gateway.

From Ethereum to Tron

The release states that the first DAI link to another blockchain will be made with Tron. At the moment, the largest stablecoin in Tron is Tether’s token USDT. Zhang considers that a collateralized and decentralized currency would be very useful for users of that chain.

Cross gateway allows tokens to transfer between first-layer blockchains, transiting through Basechain (formerly PlasmaChain), the Loom blockchain. Zhang notes that this implies that “an ERC20 token like DAI can enter through the Ethereum transfer gateway and exit through the Tron transfer gateway as a TRC20 token.

Some Doubts about Security

Regarding security, Zhang said that they use a multisig system that requires three quarters of the validators on Loom Basechain. It should be noted that the consensus of this project is based on the Delegated Proof of Stake (DPoS) protocol.

Some doubts arose among the members of the cryptocurrency ecosystem. Eric Corner, developer of Ethereum, expressed to the Loom team his concern about the collusion risks that the system could present.

Loom explained that it would be necessary to control 3/4 plus 1 of all blocked tokens to attack the network. This could be more expensive than most attacks on a network governed by the Proof of Work (PoW) protocol.

He supports the claim that more than 16 million DAIs are currently blocked for participation in the Loom Basechain consensus. Someone could buy Basechain’s native token LOOM to try to steal it, but the price of LOOM would increase if it occurs. Therefore, it would be increasingly expensive to make a 3/4 attack.

Likewise, Loom recognizes that the system is not perfect, but it says that it is a good start while its market capitalization increases. Right now, they enabled transfers in the test network preliminarily to detect any problems before activating them in the Mainnet. The release does not indicate a date for transfers to be available on the Mainnet.

By Willmen Blanco

Slow Arrival of First Bitcoin Futures Traded On Bakkt

Willmen Blanco
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Slow Arrival of First Bitcoin Futures Traded On Bakkt

Bakkt’s first Bitcoin future contract was signed on Sunday, September 22nd, 2019 at 8:02 p.m. ET. Ten hours later, only a volume equivalent to 28 bitcoins had been traded.

The offer of Bitcoin futures contracts that Bakkt had tried to introduce into the U.S. market for over a year is now available to investors. The first contract was traded on the night of September 22nd. However, after the first few hours, only a volume of futures worth 28 bitcoins had been traded.

The first exchange occurred at 8:02 p.m. ET at a price of USD 10,115, as Bakkt commented on Twitter. Seven hours later, a volume of 18 bitcoins had been traded, but in the following hours that figure rose close to 40%.

The futures exchange said that the data feed will be available for free until June 2010. However, the FAQ section informs that making a subscription will be necessary. At the time of writing this article, the graphs only show data on the price and trading volume.

Bitcoin futures supported by Intercontinental Exchange (ICE), owner of the New York Stock Exchange, had been postponed twice by regulators amid great expectations. Likewise, the products of other companies such as LedgerX have also been rejected or postponed several times.

The launch is expected to attract a significant number of investors, who could be encouraged by the possibility of trading cryptocurrencies on a platform endorsed by U.S. regulatory bodies. For that reason, many people in the ecosystem have expressed on Twitter their disappointment in the relative low demand occurred in the first trading hours.

Unlike the products traded in 2017 on the CME Group platform, these Bitcoin futures contracts will be physically settled, and so people will receive bitcoins at the end of the trade.

For and Against

The main reason why the trading volume seems insignificant right now could be the fact that Bakkt’s Bitcoin futures are not available to retailers, who represent most of the market.

Consequently, users might not see the realization of expectations about a higher volume of exchanges that could affect Bitcoin’s price, which has remained with slight fluctuations around USD 10,000 for two months.

Jhon Torado, director of research at TradeBlock, said that decent trading volumes might be seen of the product, conservatively anticipating the landscape. However, he would expect a demand somewhat in line with current contracts settled in cash, such as those offered by the CME.

Since May, the number of open positions had shown signs of growth, with at least 5,190 at the end of a trading day. On this point, the CEO of CME Group, Tim McCourt, commented through e-mail on August 23rd that the number of contracts per day in May had amounted to an average of 13,600, equivalent to USD 515 million or 68 thousand BTC.

McCourt explained that, on May 13th, a record volume of BTC was traded in a single day through 33,677 contracts (168 thousand bitcoins, equivalent to USD 1.3 billion notional).

While Bitcoin’s price fell below USD 10,000 over the weekend, Bakkt continued as planned, which many consider positive. However, in view of the platform’s trading volume, others ironically commented on a possible lack of interest on the part of investors.

By Willmen Blanco

Kik, an Instant Messaging App, Will Close its Operations amid ICO Controversy

Andres Chavez
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Kik, an Instant Messaging App, Will Close its Operations amid ICO Controversy

After it was made public that the crypto subsidiary of Kik Interactive was going to dismiss dozens of employees, the instant messaging mobile app itself announced that it would be ceasing operations, through its Chief Executive Officer Ted Livingston.

The piece of news was reproduced over the web via a blog post by the firm itself. Livingston explained that Kik Interactive was forced to close its doors because of a current lawsuit started by the U.S. Securities and Exchange Commission (SEC.)

“After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight,” Livingston explained.

Only 19 Core Developers

Not only is Kik closing down the doors of its messaging app, but also, the firm will reduce crypto-related operations to only 19 core developers, in an attempt to promote the use and adoption of the company’s crypto asset, KIN.

Livingston detailed that Kin “has over 2,000,000 monthly active earners, and 600,000 monthly active spenders. Whilst losing Kik will have a big impact on these numbers, the continued growth of the Kin Ecosystem has more than made up for it.”

The issue between Kik and the SEC actually started over a 2017 initial coin offering (ICO) of the KIN crypto asset. The initiative managed to raise $100 million, but the financial watchdog stated that it was an unregistered securities offering, thus it was not legal.

A Direct Impact on KIN’s Price

Those allegations came in June, and unfortunately for KIN holders, they have had a direct impact on the cryptocurrency’s price: from that moment, it has collapsed from $0.000036 to $0.0000105 as of the moment of writing this piece, per Messari’s data.

Regarding Kik’s decision to shut down the Kik Interactive instant messaging app to shift the company’s focus towards the development of the crypto asset, Livingston said that “Kin is a currency used by millions of people in dozens of independent apps. So while the SEC might be able to push us around, taking on the broader Kin Ecosystem will be a much bigger fight. And the Ecosystem is close to adding a lot more firepower.”

The news about the mass dismissals at Kik’s crypto subsidiary was first reported by Calcalist, a site from Israel. The publication also provided the details about the company’s restructuring process, something that was later confirmed on the Kin Foundations’s official space on Reddit. A spokesperson said: “I can confirm a restructure is happening.”

The Kik Messenger

The Kik Messenger is a freeware instant messaging platform for mobile devices, developed by Kik Interactive, a company based in Canada. It could be obtained by iOS and Android users, and it allowed users around the world to write text, send videos, photos, sketches, mobile pages, and other content.

Kik is famous around the industry for its focus on protecting user anonymity. It is one of the few services that allows people to register without having to provide a phone number.

By Andres Chavez

The Reason Why Binance Invests in a Chinese Startup

Maria Rodríguez
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The Reason Why Binance Invests in a Chinese Startup

Although the exact amount of the investment is not known, it is known that it represents a strategic contribution for Binance.

The important cryptocurrency exchange company Binance recently announced that it made a million-dollar investment with the Chinese firm Mars Finance.

There is little information about the financial movement, but according to sources from this company, the investment in this Chinese startup represents a “strategic action” for the largest and most important crypto exchange house in the world. The exact amount of the contribution Binance made to Mars Finance, or how it specifically made this disbursement, is unknown this time.

According to Chinese financial data, the company dedicated to the source of data and new technologies for finance, Mars Finance, is valued at more than 200 million dollars, and has an important participation in the business of the Asian country.

For some experts it is strange that Binance makes such an important investment to this company based in China because the company has other objectives or has participation in another economic sector. However, when referring to this strategic action, there is a possibility that everything is planned to benefit Binance at some point.

Changpeng Zhao, who is CEO of the important company, discussed this investment and clarified that this is a contribution to the entire crypto industry and not only to the companies involved.

Zhao said they have an important task to complete, and that it is their duty to support the adoption of cryptocurrencies so driving companies like Mars Finance is an advance to that mission.

“We have large respect for data, news and research firms which support the positive growth of the blockchain industry. We will continue to pursue strategic investment opportunities in our mission to bring crypto further mainstream, increase adoption and accessibility, and help the industry grow sustainably”.

Binance was not the only company to make a contribution to the Chinese firm. It is known that companies such as Ceyuan Ventures and Matrixport decided to join in making an investment. Matrixport is known since it is the financial services startup founded by one of the Bitmain’s managers, Jihan Wu.

The powerful technology firm Mars Finance was founded by Chinese businessman Wang Feng, in mid-2018, and it already represents a powerful ally for other financial companies in the world. It was known, according to Bloomberg, that this has been the second time a round of investors has been held in order to seek financing for their projects. On the first occasion, Huboi, OKCoin, and IDG Capital made the capital outlay for Chinese firm.

Mars Finance is also dedicated to market reports and capital investment studies at risk points, according to data expressed on its website.

This news about the important investment that Binance made to a company in China, seeks to note that the largest cryptocurrency exchange company on the planet is very interested in being the most active one in the industry, as well as being a fundamental pillar to promote and support the adoption of cryptocurrencies in the world’s financial markets.

By María Rodríguez

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