The Sixth Largest Insurance Company in the World Uses Ethereum

Maria Rodríguez
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The Sixth Largest Insurance Company in the World Uses Ethereum

Families may place obituaries in local newspapers to activate searches and verify if their loved one has a policy

MetLife, one of the world’s leading insurance providers, located in New York, is using Ethereum to transform the life insurance industry and improve the claims process. LumenLab, the MetLife subsidiary based in Singapore, is working with the NTUC Income insurance cooperative to launch “Lifechain”, a smart contract platform based on Ethereum to help streamline processes, according to Steven Ehrlich, a Forbes partner.

Zia Zaman, CEO of LumenLab, commented: “The future of Distributed Ledger Technology in life insurance will depend, in a way, on the participation of the public sector. Those jurisdictions and governments that are more innovative will see insured citizens and their jurisdictions benefit from less friction, more fulfilled payments and an improved experience in general”.

After the loss of a loved one, some family members may not know that the person was insured. This is where blockchain technology comes into automate life insurance claims.

The collaboration between Singapore Press Holdings and NTUC Income will help families, who place obituaries in a local newspaper, instantly activate searches to see if their loved one has a life insurance policy.

Automatic Process

The technology works by sending the deceased’s national registration identity card to the platform called Lifechain. The information is sent as hash data, once the consent of the family has been obtained.

As part of the second step, families are notified when a policy is found, and a notification is automatically sent to the insurer so that the claims process can begin. In this way, it would not be necessary to wait for the families to conduct the initial process.

Julian Tan, Chief of Digital Business at Singapore Press Holdings (SPH), said: “SPH hopes to expand Lifechain to include more insurers so we can provide more comfort to family members, so they can take be in charge of the administrative affairs of the deceased in a safely way”.

Insurance companies are increasingly resort to blockchain technology, due to the benefits it offers, such as the ability to store information unalterably and safely, as well as assigning a kind of code different to each operation, which can be verified in the future without major inconveniences.

Insurers Adopt Blockchain

Recently, the technology firm BlockClaim received USD 627,000 in funds for a platform that uses blockchain to automate insurance claims.

In addition, the British insurance agency Legal & General recently announced that it has partnered with Amazon to create a blockchain system, with the aim to manage pension agreements.

According to some analysis of Markets and Markets, the use of blockchain technology will move almost USD 1,394 million in the insurance sector by the year 2023. This figure would imply an annual growth rate of 84.9% from 2018, when the figure was 65 million dollars. According to the institution, the increase in profits will be due to these companies, which need to have transparent and reliable systems for their users.

Blockchain continues achieving more fields. Thanks to these technologies, insurers will be able to know the identity of the clients that conduct the transactions, as well as the date and time of the issuance of the policy. In this way, distributed Ledger Technology could help reduce the fraud rate and allow an easy management of the platform, towards automatized and safe procedures in everyday life.

By María Rodríguez

Central Banks Use Blockchain to Stabilize Financial System

Willmen Blanco
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Central Banks Use Blockchain to Stabilize Financial System

Cryptocurrencies and Blockchain may not to be in line with policy objectives and nation-states, especially with the emergence of Libra and policy makers’ reaction worldwide. However, some collaboration areas have Bitcoin and cryptocurrencies to reduce the volatility generated by the conventional financial system

The 2008 Great Recession showed the weaknesses and strengths of an integrated global economy and stimulated political innovations to leave the silo of monetary policy, nation by nation. A mechanism suggested for doing this was to increase currency swaps: open lines where central banks agree to exchange their national currencies with each other to help alleviate financial problems in foreign jurisdictions increasingly affecting globalized national currencies.

This was tested on the Chiang Mai Initiative (CMI) and the Asian financial crisis, but it was during the 2008 global financial crisis when this regional configuration first became a global reality and it is only now that cryptocurrencies and Blockchain are playing an experimental role.

Interbank Loans

In 2017, the Federal Reserve (Fed) extended US dollar swap lines with the European Central Bank (ECB) and the Swiss National Bank (SNB), allowing them to meet the domestic demand for US dollars. The European and Swiss demand for this currency was affecting short-term financing markets and interest rates. Currency swaps allowed the Fed to reduce pressures without directly financing foreign banks; thus, the ECB and the SNB intervened in its place.

The Fed voted to extend the swap lines to other established G10 central banks, as well as to less established central banks “as necessary to address the tensions on the money markets in other jurisdictions.”

However, the Fed is not alone, since the ECB would send euros to Sweden, and the SNB would send Swiss francs to the ECB. Banks worldwide had borrowed too much money in foreign currencies, and central banks needed to have reserves in those foreign currencies to meet demand. In effect, a global and integrated economy needed a coordinated monetary response.

Some Latin Americans

It is difficult for central banks to decide to whom to extend exchanging lines, so they need to analyze which governments and banks outside of the G10 can have that privilege. The Fed decided to extend the swap lines to Brazil, Mexico, Singapore and South Korea, which were not established as G10 members. The instability in those economies could have affected the US economy; however, the criteria for choosing those countries showed what happened when a central bank, whose brand is based on trust, has to choose which other banks to trust.

Failing to Pay

In 2013, the Fed decided to keep indefinitely open the exchange lines it had open during the crisis, converting what had been a temporary solution into permanent support for the global financial system, ensuring that banks that borrowed foreign currency could cover some of the risks of non-payment of those debts.

Each extension of a currency swap creates a moral risk on the part of the issuer: European banks may have wanted US dollars because they had extended their debt capabilities too much in this respect. A currency exchange with the Fed guarantees that they will never face financial consequences for that overextension.

Blockchain Experiences

At a Business of Blockchain Conference held at the Massachusetts Institute of Technology, the FinTech Director of the Monetary Authority of Singapore, Sopnendu Mohanty, said: “The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments.”

He also talked about distributed ledgers as a possible solution for dealing with central banks not as established in the global financial system as G10 central banks and explicitly mentioned the development of future pilot cross-border currency exchange projects stimulated by distributed ledger technologies.

The Canadian policy speech mentioning the national experiment in Distributed Ledger Technology or DLT (Jasper Project), in which the Bank of Canada was to embark, explicitly mentions the financing of cross-border currency trade and swaps. The Bank of Canada said that “one estimate suggests DLT could enable banks to save as much as $20 billion a year in global back-office costs if applied to cross-border payments, securities trading and regulatory compliance.”

Near-Instant Cross-Border Settlements

Of course, DLT can help solidify the formation of currency swaps, even among associated central banks with possible reasons to doubt each other. DLT and blockchains allow central banks to make almost-instantaneous cross-border settlements, which allow much-needed funds to flow quickly in times of crisis.

However, it is tacitly admitted that some of the principles generated by Bitcoin and cryptocurrencies have paradoxically addressed key points of weakness in the evolution of the global financial system.

Currency swaps are a view that domestic monetary policy is eroded by foreign money markets. However, the ability to perform transactions without a very high confidence threshold and the need to do so immediately can derive from a fundamental cryptocurrency principle.

By Willmen Blanco

Colombia Gives an Exchange House License to Operate with Cryptocurrencies

Maria Rodríguez
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Colombia Gives an Exchange House License to Operate with Cryptocurrencies

Citizens will have the opportunity to change digital assets for Colombian pesos. The platform of the exchange houses will have legal license

After being inoperative in Colombia for a while, the cryptocurrency exchange house Buda will reopen its operations in the country in the coming days, as it was announced by executives of the exchange house a few days ago.

According to local news, the exchange house will return to its operations after the Colombian government granted them the corresponding permits to operate freely. However, an executive of the company denied the information saying that the permissions have not been approved in their totality by the governmental authorities.

Regarding this matter, Alejandro Beltrán, who is the regional manager of the exchange house, told that once again Colombians will be able to conduct these operations on a daily basis. Now, they will again have the option to exchange cryptocurrencies for Colombian pesos. “We continue working and we are still here”, Beltrán said.

During an interview, the executive of the company explained that negotiations with government authorities have taken a few months and that this is due to the fact that it is a process of “sensitization” that the government must do with private companies and the public industry. These conversations, according to Beltrán, reinforce the ideas of new business models. “We were more than eight months socializing and raising awareness, interacting with public and private entities”, Beltrán affirmed.

During the interview, the executive mentioned the importance that Colombia gives to the operations of the multinational company. According to his statements, the region contains a high demand rate of cryptocurrencies. “We launched it again because Colombia is a very important place in the Latin American ecosystem. The volume of operations in Colombia and the high demand place Colombia as the most interesting place in our region”.

In addition, there is a large community of users who have been involved in the entire process to re-enable the operations of the exchange house. Beltrán, did not mention more details about the commissions and limits that would take place after the exchange office is operational again.

On the other hand, the Colombian government has not issued any official communication about the negotiations or the progress related to the legislative policies in this matter. It should be mentioned that, a few weeks ago, the legislative congress rejected a proposed law for the legal use of cryptocurrencies.

In this way, it is not so clear the environment in which Buda can operate in the Colombian territory. It stills unknown if the government will include clauses for a possible reform of regulatory laws related to foreign exchange operations.

In mid-August of last year, Buda was forced to close operations due to difficulties with the country’s banking. In June of 2017, the Colombian bank Davivienda closed without any notification, which generated strong difficulties until its closure.

According to Localbitcoins sources, the South American country represents an important community of users interested in the exchange of bitcoins. It is also known that there are many entrepreneurs and technology enthusiasts who make economic life within the crypto market in that region and that is the attractive for new exchange houses and to make grow the crypto-community.

By María Rodríguez

Lubin Criticizes Libra: “It is a Centralized Wolf in a Decentralized Sheep’s Clothing”

Andres Chavez
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Lubin Criticizes Libra: “It is a Centralized Wolf in a Decentralized Sheep’s Clothing”

Facebook’s Libra cryptocurrency was, finally, announced last week. And whilst the ecosystem and the token will not be fully functioning until the first half of 2020, the whole industry has provided their take in what has been, arguably, one of the biggest developments in cryptocurrencies and blockchain technology in 2019.

The latest expert to provide his insight about Facebook’s coin is Joseph Lubin, known for being a Co-Founder of Ethereum. The crypto analyst stated in a piece published in specialized site Quartz this week that the recently unveiled Libra token is similar to a “centralized wolf in a decentralized sheep’s clothing.”

Libra is still Making Headlines through Opinions

With much fanfare, Libra came to prominence last week at the moment of the announcement of its whitepaper, in which it introduced itself as a blockchain “built from the ground up to prioritize scalability, security, efficiency in storage and throughput, and future adaptability,” according to the mentioned document.

Libra claims to work in the development of a “stable currency built on a secure and stable open-source blockchain and governed by an independent association.” The whitepaper states that it will be a decentralized asset. However, Lubin seems to think otherwise.

Lubin writes, in the article, that Libra’s white paper describes feelings that are not that uncommon among several investors in the crypto family. Libra’s document says that “sending money across the globe should be as simple and inexpensive as sending a message on your phone,” and “financial infrastructure should be globally inclusive and governed as a public good.”

The Need to Trust

Lubin notes that the whitepaper states that “people will increasingly trust decentralized forms of governance,” but Ethereum’s co-founder wrote that users need to trust Libra’s fiat currency and government bond banking, and merchants also needs to fully trust that the network will be administrated and directed in a responsible way.

The expert identifies it as a centralized project:  “Perhaps most importantly, it requires our trust that Libra will eventually transition to a more ‘permissionless,’ decentralized system, whereby anyone can validate the network, rather than the restrictive member evaluation criteria keeping control in the hands of the initial 28 firms.”

Not everything is Negative

However, Lubin also spots some positive elements in Facebook’s Libra project. For example, he identifies that the ecosystem could reach two billion within the next few years, and by then, crypto user experience (UX) could be dramatically improved.

“In one fell swoop, talented UX designers could reduce the current friction of using cryptocurrency. Managing private keys, understanding ‘gas payments,’ and installing crypto browser plugins could be as simple as pressing ‘send’ in WhatsApp, another Facebook-owned entity,” he wrote in his article.

Libra’s announcement marked the end of the year-long speculation about Facebook’s cryptocurrency. The reviews from the industry were mixed, but it should be noted that expectations from most sectors were extremely high. Government regulators are also concerned.

Lubin also noted that ConsenSys developers (a firm closely related to Ethereum) already ran analysis on the code, and identified that there are a lot of borrowed ideas from Ethereum.

By Andres Chavez

G20 Will Meet to Discuss Regulations for Cryptocurrencies

Maria Rodríguez
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G20 Will Meet to Discuss Regulations for Cryptocurrencies

It is expected that during the summit of industrialized and emerging countries (G20) this year, a special meeting will be held to discuss crypto-regulation

The annual G20 summit will be held soon in Osaka, Japan, where economic topics of great relevance to member countries will be discussed. On this occasion, the cryptographic community is very attentive because it is planned that, this time, there will be another meeting where the regulatory processes for cryptocurrencies would be discussed, as well as a legal framework that will help member countries to adopt cryptocurrencies. The purpose of the meeting is for the organization to define the best course of action on legal matters regarding cryptoactives.

The meeting called V20, Virtual Asset Service Provider’s (VASPS’s) will be an alternate meeting that will take place officially during the G20 summit; it is scheduled to be held during June 28th and 29th. During this great event, the national associations linked to blockchain technology will have the opportunity to meet with representatives of other countries of the organization. In the summit the members will evaluate a clear and legal proposal for the cryptographic industry, developed by the Working Group and the Financial Action Task Force (FATF).

Regarding this idea, FATF launched, last June 21st, a set of proposals that will help achieve an efficient regulation for the cryptocurrency industry. Among the proposals, certain standards stand out for blockchain technology and cryptocurrencies. This awakes expectations among lawmakers around the world.

The points that have attracted more attention are about financial security using blockchain technology. In this way, Naokazu Takemoto, who is a Japanese congressman, said that they recognize this technology could prevent crime and combat corruption. “The VASP industry recognizes the importance of clear regulation to prevent financial crime and mitigate corruption”, he commented.

It is undeniable that the industry needs a legal environment that supports its operations, helps protect users and promotes the evolution of financial processes. On the other hand, it is a fact that it could also be negative for business with cryptoactives; especially if these regulations suffocate transactions or prevent transnational movements with cryptoactives.

On this matter, Roger Wilkins, Former President of FATF, explained that excessive regulation could prevent users from using these platforms, destroying the industry. “What we are hearing from the industry is that the new rules may have the opposite effect to what was intended, effectively enforcing the cryptographic transactions of the controlled platforms, which are currently one of the best ways we have to gain visibility on financial crime”, he concluded.

The lawmakers who will be in charge of discussing these measures agree with the fact that it is absolutely necessary to adapt the rules to the changes that represent this technology, and take advantage of this moment to regulate adequately the cryptocurrencies’ ecosystem.

In some days, the crypto community will know the results of the G20 meeting, just when cryptoactives like Libra, which would be launched by Facebook, are been criticized and when Russia and other countries are preparing their own regulations for cryptoactives in order to try to protect their users.

By María Rodríguez

Brothers from Israel Arrested for Bitfinex Crypto Hacking Attack

Andres Chavez
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Brothers from Israel Arrested for Bitfinex Crypto Hacking Attack

Sooner or later, justice will be done, and that applies to everything we do. And, when it comes to the crypto industry, punishing criminals that have defrauded or hacked platforms and accounts helps not only to restore the balance in the world, but also, to remind us that financial regulators and law enforcement agencies in nearly all locations are working to provide a safer environment for people to trade crypto assets.

The most recent piece of news on that front is the arrest of two Israeli brothers that were involved in the hack of the Bitfinex cryptocurrency exchange, as per a report of specialized news site Finance Magnates, at the start of the week.

Eli and Assaf Gigi: the Two Suspects

The page identifies the two siblings as Eli Gigi and Assaf Gigi, a police spokesperson told the mentioned site. They are related not only to the hack of Bitfinex, but also, to other similar attacks by using the phishing method: they trick users into providing their account details and then take advantage of the granted access.

The thieves, reportedly, stole tens of millions of dollars with the shady proceedings, so arrests were due. They have not been indicted yet, but they are suspicious of leading long-term systematic crypto theft by illegally acquiring login credentials and, therefore, access to people’s accounts.

Phishing Victims

The brothers are accused of developing credential-stealing clones of some of the most relevant crypto trading platforms in the planet, as well as wallets, sending links of the phishing pages to Telegram groups and other sites where people in the industry gather for communication. The attack for which they are being taken into custody is a 2016 one, which resulted in dozens of affected accounts and users.

The money that the hackers stole in the Bitfinex 2016 attack has since been moved recently, as per multiple reports this month.

The majority of the victims, according to police sources, are from the European Union and the United States of America, two places in which law enforcement is ever-attentive to catch criminals linked to crypto scams, hacking scandals, and fraudulent activity in the industry.

The police performed a raid and found, according to the reports, a crypto wallet with a curious amount of funds: there was substantially less money than the figure that the brothers stole back in 2016. The siblings are, apparently, well achieved academically, with Eli Gigi being a graduate of a technological unit of the Isarel Defence Forces.

Most recently, as crypto specialized sites have reported since last week, a Firefox zero-day security flaw was exploited in recent attacks against Coinbase, one of the most renowned and used cryptocurrency exchanges in the planet. It was, allegedly, merged with another zero-day flaw that targeted the firm’s employees.

Bitfninex Will be Offline for Upgrades, Albeit Briefly

Speaking of Bitfinex, the site will be offline this week for a brief period of time, as it installs an upgrade. The information was reported by the crypto exchange via a Medium post.

The expected date of the upgrade will be June 26th, and the projected time that the platform will be offline is seven hours, as a maximum. The company’s hybrid counterpart, Ethfinex, will also be off the web for maintenance in the same period.

According to Bitfinex, the update will help “enhance the stability and scalability of the iFinex matching engine.” People will not be able to trade, view, or access their crypto wallets for the duration of the shutdown.

By Andres Chavez

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