Cryptocurrencies, a Way to Help Consumers in Developing and Unstable Economies

Andres Chavez
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Cryptocurrencies, a Way to Help Consumers in Developing and Unstable Economies

By now, even the people that do not hold cryptocurrencies for one reason or another are familiar with them, this is, their power, and their potential as valuable assets. It is not a coincidence that the market cap in the industry has grown substantially in the past few weeks, and that each day, more people jump in the crypto bandwagon.

However, what most observers may not realize is that crypto also represents the future of money for consumers in countries with unstable economies. That is precisely what OKEx, which is one of the largest cryptocurrency exchanges by trading volume, thinks about the potential of these assets.

OKEx is an exchange platform based in the very stable European country of Malta. By this time last year, the ecosystem became the single biggest exchange by reported turnover. It serves a large market of traders, offering a suite of enticing tools. It has been around the industry since 2017.

A Similar Sentiment

In the same vein, and, much like OKEx, other exchanges, platforms, and crypto services providers believe that these assets represent not only the present, but also the future of money, transactions, and finances, especially in developing or unstable nations.

Officials at OKEx believe that digital currencies have the capability of providing freedom to consumers in nations where the overall state of the economy is considered unstable. The reason behind this is mainly that inflationary rates make fiat payments nearly impossible and thoroughly impractical.

Digital Dominance

The platform identifies an era of digital technology “dominance,” in which the more traditional systems and processes are having a hard time adapting to the incredible demand for financial services all around the world. And it is a fact that a large portion of these demands come from developing countries.

These nations are known for having unstable banking services, and the access to them is not always guaranteed, or easy for that matter. Other problems may arise in these countries, as well, such as high costs for currency exchanges and remittances for people to send money to their homes. These situations often result in inequalities, which can be attacked by cryptocurrencies and the blockchain technology.

It is staggering that almost 2 billion adults (1.7 billion, to be more precise, according to 2017 data from the World Bank) are not receiving banking services and do not have an account. However, the crypto fever is evident in nations with high inflation and unbanked people rates.

Taking the Power to the People’s Hands

Whilst it is true that the lack of a proper regulatory framework has been a significant stumbling block in specific locations in the past (such as India, for example) and still at present, the blockchain technology applied in the crypto space has the potential of taking the power to the people’s hands when it comes to financial services, eliminating waiting times in currency exchanges and remittances, as well as third-party payment networks and systems.

Some notable fiat currencies have lost steam at the same time that people become more and more interested in crypto assets, which has resulted in a crisis of the former around the planet. Experts firmly believe that the planet’s financial environment will be based on the blockchain model, which is welcome news for the unbanked and the people struggling with inflation and other related situations in third-world and developing nations.

By Andres Chavez

The United States and Japan Receive more Traffic in Crypto Exchanges Worldwide

Maria Rodríguez
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The United States and Japan Receive more Traffic in Crypto Exchanges Worldwide

South Korea and Indonesia are the next regions with the most reception of cryptocurrency exchanges. Rich countries are the ones that most invest in digital assets

Recent research showed that The United States and Japan are the main sources of traffic for cryptocurrency exchanges around the world. The study published by the crypto news site The Block indicates that the leader of that list is the American country.

The information was also detailed in Japanese media and shows that 24.5% of the total traffic sent to cryptocurrency exchanges originates in The United States. Japan ranks second, with 10% of total traffic, whilst South Korea obtained approximately 6.5% and Indonesia around 4.5%.

However, these results could be slightly different if it is considered that, in countries such as China, the access to cryptocurrency exchanges is blocked. For this reason, due to the repression of some governments that ban the exchange of cryptocurrencies, users in these territories generally access through Virtual Private Networks (VPN). In this way, China may account for a larger percentage of exchange users that are being falsely attributed to other countries, thanks to the VPN.

The process for the computer to act as if it were in another country -one with different permissions- is simple for some users. VPNs have the function of masking the IP addresses of users, making it appear that they are in another country. This fact reduces the precision of the study about the countries that participate in the exchange processes.

Largest Cryptocurrency Trade

These recent studies found a positive correlation between a country’s gross domestic product per capita and the volume of Internet traffic directed to cryptocurrency exchanges.

Whilst it is true that some companies that have suffered losses resort to cryptocurrencies -as well as countries that face inflation do- the document states: “Data shows poorer countries are not trading crypto as much as wealthier countries”. Taking this into account, cases of countries with affected economies would be the minority in exchange processes, unless the user employs VPNs.

These results could mean that countries whose citizens have more acquisitive potential are betting on cryptoactive, even when the price instability in past months, as well as the theft of assets in some platforms, affected trust in those digital assets.

In this regard, Bitwise Asset Management, an American cryptocurrency investment manager, published a document stating that the volumes of false transactions of cryptocurrency exchanges do not affect the price of Bitcoin (BTC).

A few weeks ago, it was known that the Financial Services Agency of Japan is taking action against cryptocurrency exchanges that offer anonymous transactions or have weak identity verification practices. This measure is implemented to provide security to users, avoid fraud and works as a form of preparation for the inspection that the Financial Action Task Force will execute this fall.

Regulations in different countries seek to establish an order of rules to give a clear way in trading with cryptocurrencies, but also to protect its users. Japan is an example of this, as are American regions like Montana, which recently recognized utility tokens and exempted them from the state securities law.

By María Rodríguez

Central Bank of Laos Considered Illegal Transactions with Cryptocurrencies

Maria Rodríguez
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Central Bank of Laos Considered Illegal Transactions with Cryptocurrencies

Spokesmen of the Central Bank of Laos, claim that they do not have an optimal security system to protect its citizens from illegal transactions if they use cryptocurrencies

Recently, the Central Bank of The Lao People’s Democratic Republic issued a statement reminding citizens that transactions with cryptocurrencies, digital assets and everything related to purchase and sale of them, are not accepted in the Asian country and that their use represents a “punishable offense”, according to local reports.

The warning comes as a direct response to the recent news that some cryptocurrencies can be used in some social networks. The Lao Central Bank’s Transaction System Management Departmentissued the warning considering that, perhaps, social networks may motivate the use of these cryptoactives, in spite of their prohibition by the maximum bank in the country.

Similarly, some social groups have reiterated that in the country they have made purchases, sales and also they have used these digital assets through some commercial banks, something that authorities in charge of these areas deny, and claim to have control over the financial system that operates in the territory.

The prohibition related to the use, purchase and sale of cryptocurrencies entered into force in Laos since October last year. In that law, any public or private bank is prevented from conducting operations related to digital assets and cryptocurrencies. In that country, it is prohibited for banks to recommend the use of cryptocurrencies and investing with them.

Doing these actions would be a “crime” and converts the bank in some kind of “intermediary” in the transactions that may be linked to this technology. In these cases, blocking debit or credit cards that are being used by a customer to buy cryptocurrencies would be one of the sanctions against to those who use digital currencies.

The law about the prohibition of cryptocurrencies and their technology even ban the use of propaganda and avoid what incentives to acquire some cryptoactive. In Laos, it is also considered illegal to promote purchases or make any kind of consultation which directs a client to invest or exchange money for digital assets.

Some spokesmen of the Central Bank of Laos exhort all the banking and the financial institutions that operate in the country to follow the norms established by the State, as well as they invite to all company related with financial technology to strictly respect all the bank’s rules, and urge companies to avoid creating platforms that support possible negotiations with cryptocurrencies.

According to some press reports, the decision to strictly prohibit the use of cryptocurrencies is because the State does not consider cryptocurrencies platforms appropriate and considers them unsafe to be supported by the State’s financial machinery. The purpose is to protect its users from any theft whilst making transactions with cryptocurrencies. In addition, they consider a latent risk the use of this type of technology, since it can be used to make money laundering or scams.

The Central Bank of Laos, through an official statement, requested prudence and caution to its citizens since some people create groups that use banking logos and names of recognized institutions to conduct operations with these assets.

By María Rodríguez

Digital Lawyer Box, the Legal Technology Based on Blockchain for Current Lawyers

Maria Rodríguez
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Digital Lawyer Box, the Legal Technology Based on Blockchain for Current Lawyers

Blockchain technology would allow lawyers to connect in real time with all those involved in the process of an inheritance and avoid travel expenses

In an increasingly competitive and global environment, technological disruption reached all sectors, including the legal one, to make an important difference. In this sense, blockchain will now be part of the legal technology, or legal-tech, that will streamline the fastidious work of legal professionals.

The so-called legal-tech allows lawyers to develop their work more efficiently. Digital Lawyer Box, for example, is a tool that seeks to optimize their work, allowing lawyers to connect in real time with all participants of the processes that involve a large number of people, such as inheritances. In this way, travel expenses are avoided.

This creation was devised by My Digital Legacy that a platform for advising, managing and executing digital assets. The objective of Digital Lawyer Box is the digital transformation of independent law firms and lawyers.

Digital Lawyer Box has electronic time stamp, digital signature and cognitive cybersecurity to offer legal accuracy of date and time, trust, certification, security, traceability, automation and preservation of long-term information.

It Won Recognition

My Digital Legacy presented its initiative during the XII National Congress of Lawyers, in Valladolid, which took place from last May 9th to 11th. In this event, Digital Lawyer Box won a special mention.

With Digital Lawyer Box the legal professional can know, control and manage all the files, procedures and services related to the digital identity of the people.

In the legal sector, blockchain technology works to track transactions. The chain of blocks is very difficult to modify; hence, it can provide a complete record of any transaction, avoiding violations of the information.

Blockchain and the Smart Wills

A few months ago, My Digital Legacy presented its Smart Testament project, which uses blockchain technology to streamline procedures and also avoid travel expenses.

The mechanism is to make a smart contract known when the person dies. This document will include all the wills that the holder contemplated in life, the physical patrimony, the digital goods, the genetic legacy and the declaration of anticipated wills or vital testament.

My Digital Legacy was founded in 2012 and has become a reference in terms of the processing of digital data, guaranteeing the protection of rights such as health, honor, image, privacy, online reputation, oblivion and secrecy communications.

In addition to Digital Lawyer Box, other tools used in legal-tech are Machine Learning, which allows taking advantage of the power of algorithms to classify legal documents, and eDiscovery, which helps choose the right court for each case, allows consulting the judgments, evaluating the parties involved and reviewing a large volume of documentation.

The legal sector is constantly growing. According to the legal-tech and startups expert Marti Manent, Founder of Derecho.com and elAbogado.com, Spain is among the three or four most important startup hubs in Europe.

The development of these platforms may be just beginning, but it is already said that blockchain can replace notaries and current-human public registers. Time will tell.

By María Rodríguez

Chinese Fintech Research Institute Looks for Blockchain Experts

Maria Rodríguez
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Chinese Fintech Research Institute Looks for Blockchain Experts

The Shenzhen Fintech Research Institute is looking for 29 blockchain technology experts to develop projects and tools for its application

China maintains a strong position with respect to the use of cryptocurrencies in that country. These currencies are considered highly vulnerable assets by common users and financial institutions. However, the Chinese government bets for blockchain technology, which, according to its criteria, could be useful in many other processes such as reading and processing information, storage and technical development, as well as technological growth in many other areas of common use.

It is for this reason that, recently, a Fintech Research Institute has published a list of vacancies for various job positions in areas related to blockchain technology. The Institute is backed by The People’s Bank of China(PBoC), which expects these vacancies to be filled quickly. This project was launched by the Chinese Central Bank and the Shenzhen Municipal Financial Regulatory Bureau.

The Fintech Research Institute of Shenzhen plans to work with the Digital Currency Research Lab of the People’s Bank of China (PBoC) in order to conduct a list, which is not yet defined, of projects related to digital technology with the aim to improve administrative and financial processes.

According to the reports for vacancies in the area, there are a total of 29 new job openings available to be occupied by connoisseurs of blockchain technology. This indicates that these institutions plan to create a panel of researchers as part of a working group that will study different possibilities of using, launching support projects, and establishing solutions to problems in financial areas.

Among the most important vacancies is the search of a blockchain architect, a blockchain development engineer and a high level technical expert who will rank as the highest positions within the research and development team.

To occupy the position of “high level technical expert”, the company is looking for applicants who have a minimum of three years of experience working as an expert in blockchain technology.  The company wants someone holding qualifications such as a certification of undergraduate studies to support his educational level. Also, this person must have deep knowledge in consensus algorithms, P2P (Peer-to-peer) protocol, distributed storage systems and smart contracts.

In the same way, to occupy the position of “Blockchain Architect”, the applicant must have theoretical and practical knowledge in architecture of block of chains and also in systems related to this type of technology. The candidate would be also asked for a verifiable experience in large-scale architectural projects, such as, for example, in institutional information systems.

In the case of the last position, the “Blockchain Engineer”, the institution explained that whoever wants to fill the vacancy must handle with expertise different programming languages, such as Solidity, Java or Python. He or she must have a good level of knowledge indistributed systems and must know how to handle computing in the cloud, also with the frequent use of big data.

Although this last position requires a greater practical management of the systems related to technology, it is the one that fewer years of experience request. However, it is the most important to establish the work team and achieve all the company’s objectives.

By María Rodríguez

Jens Weidmann, Bundesbank’s President, States that Central Bank Digital Currencies Are Risky

Andres Chavez
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Jens Weidmann, Bundesbank’s President, States that Central Bank Digital Currencies Are Risky

Germany is one of the countries that has stayed on top of the crypto space regulation landscape for a considerable amount of time until now. There is a lot of interest in cryptocurrencies and related digital assets in this stable and powerful European nation.

This week, the chief at the Nation’s Central Bank has stated that central bank digital currencies represent a sizable risk, and he has warned people about some of those situations in an attempt to protect their interests and resources. He says that they could destabilize financial systems and make bank runs worse.

“Serious Consequences”

Jens Weidmann spoke at the opening of the Bundesbank Symposium in the city of Frankfurt, Germany, this week. He observed, inter alia, that the widespread and global use of digital central bank money may have “serious consequences.” He advises people to think things through before entering the activity.

The president of the Deutsch Bank predicts that easy access to these assets could make bank runs in times of crises more notable. “In a crisis, financial stability may be more vulnerable than it is today, with digital central bank money very liquid and secure investment alternative. Therefore, both ‘escape to safety’ in general and a digital bank run in particular could take place faster and to a greater extent than in the past.”

Additionally, he said that demand for CBDCs (the term to refer to Central Bank Digital Currencies) has the potential of being “greater or more volatile than that for cash, with corresponding effects on the central bank’s balance sheet.”

Modern Means of Payment

As the official notes, there could even be issues for people when things are going well regarding CBDCs, as they can change business models of banks and significantly alter financial markets.

According to Weidmann, “I see ourselves [the Bundesbank] as having the duty to offer citizens modern, fast and also internet-enabled means of payment. The idea is to develop solutions that are up to date with the latest technology without incurring unnecessary risks to financial stability.”

“The carelessness of Epimetheus and Pandora urges us to be careful,” he also stated on a similar note.

The timing of Weidmann’s comments aligns with several other nation’s attempts to investigate about the blockchain and distributed ledger technology. For instance, over 40 central banks are now experimenting with the technology.

An Alternate Project

Frankfurt’s Bundesbank Symposium also helped Weidmann talk about a joint venture of the country’s central bank and Deutsche Börse, the nation’s stock exchange operator, involving the world-changing blockchain technology.

To be more specific, the project involves using the blockchain technology and its advantages to settle cash and securities.

According to the official, the project had to endure elevated computational costs and, as a result, it took a little longer than anticipated.

“Similar experiences have been made elsewhere in the financial sector. Despite numerous tests of blockchain-based prototypes, a real breakthrough in application is missing so far,” he expressed in the same speech.

By Andres Chavez

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