Swiss Company of Exchange Will Use Stablecoin Linked to Franco for Local Use

Maria Rodríguez
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Swiss Company of Exchange Will Use Stablecoin Linked to Franco for Local Use

It is expected that the official launch of the SIX stablecoin will take place by the middle of 2020

In a recent press release, spokespersons of the Swiss exchange company SIX revealed they are developing a stablecoin that will be linked to the Swiss franc. This has the purpose of using said asset to improve all the processes of transactions within the private network, SIX Digital Exchange (SDX). It is not known if this project will only work as an internal use of the company or if it will be open to the public.

The piece of news does not surprise a lot since a few months ago the Director of the Exchange Department of SIX, Tomás Zeeb, had announced that they would be developing a plan for the issuance of some tokens created for its digital exchange platform. “At the end, we want to be able to tokenize our existing securities, values, fixed salaries and funds. The token may replace the percentage someday”, he said.

Despite this announcement, plans for the installation are not yet concluded. The beginnings of the development and creation project are scheduled to begin by the end of this summer, beginning of August. In addition, they estimate that by the year 2020 the official launch can take place.

SIX at the Vanguard of Crypto-technologies

In recent years, Switzerland has managed to emerge as one of the countries with the most financial openings towards blockchain technology and cryptoactives. It is for this reason that Swiss companies dedicated to this technological profile, such as SIX, have managed to position themselves among the financial markets of the country, and, in this way, increase their aspirations to generate a change in the ways of managing finances.

SIX is one of the first ones to create market financial structures, specifically among the cryptocurrency market. It has not stopped in modernizing its tools of development. In the middle of last year, SIX announced that during the year 2019, its SDX platform would be ready to tokenize bonds and actions as a first instance, to then continue with digital versions of other assets of value as pieces of art, and objects of great value.

SIX has been the most successful company in the local financial market and now it is very influent. The level and position of its actions in the financial market is inspiring other small exchange companies to continue with their development plans.

Nearby examples are the German exchange company, Deutsche Börse and the Frankfurt Stock Exchange, which at the moment has been associated with the telecommunications company supported by the Swiss government, Swisscom, which would have an advanced tokenization system.

Similarly, it was recently known that the Russian National Settlement Deposit Fund would launch, in Switzerland, a “Decentralized Digital Depository” system, which will safeguard and distribute more than three types of tokens that are not known yet.

Stablecoins have best reputation than cryptocurrencies like Bitcoin. This happens because of the stability and volatility problems that some of them suffer. Institutions like the European Central Bank (ECB) are closely watching the behavior of stablecoins, which could avoid volatility and achieve better results for local uses in the countries that do not accept cryptocurrencies yet.

By María Rodríguez

Bitcoin Miners in Iran Will Suffer Power Cuts

Maria Rodríguez
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Bitcoin Miners in Iran Will Suffer Power Cuts

The consumption of electricity increased by 7% compared with that of last year. This indicator is presumably related to crypto-mining

Each machine to mine cryptocurrencies consumes the equivalent of the energy consume by 24 Iranian homes, according to Mostafa Rajabi Mashhadi, an official in the Energy area of ​​that country. For this reason, the spokesman warned users who mine Bitcoin and other cryptocurrencies in the Arab region that the government will detect their activities and will cut their connection to electricity service for high consumption.

The decision comes because the Iranian government pays close to USD 1 billion in annual subsidies, in order to close the difference between the real costs of electricity and the amount that is charged to consumers. A surplus in energy demand would disrupt the current budgets that government authorities handle until now.

In this regard, the Iranian Deputy Minister of Energy, Homayoun Haeri, stated that electricity bills for cryptocurrency mining activities should be issued according to real prices and with the same rates established for energy exports.

Energy Consumption in Growing

Last month, the country’s electricity consumption increased by 7% compared to that of the corresponding period of time last year. This is according to representatives of Tavanir, an Iranian state company in charge of energy supply and distribution.

The “thirst for electricity” of Bitcoin miners would be the cause of this increase, according to Mostafa Rajabi Mashhadi, who explained that in Iran it is illegal to use the national network for cryptocurrency mining.

“All Bitcoin mining machines that run on the same source of electricity available for homes consume the equivalent of 24 Iranian homes”, the spokesperson added. However, to date, the government administration has not yet established a tariff that is applied to energy consumption for cryptocurrency miners.

Bitcoin, an Alternative to the National Currency’s fall

Since last September, Iran began to show a positive attitude towards the crypto-industry, when the main government officials, including the Ministry of Information Technology and Communications, the Central Bank, the Ministry of Energy, inter alia, accepted the crypto-mining industry.

This behavior occurred in response to some fluctuations in the value of the national currency, the Iranian rial, presumably generated by the sanctions that the US government applied to the Islamic Republic.

However, Iran would have to invest in spaces in which users can mine without inconveniences or establish the rates that digital miners must pay for the surplus of energy they consume.

Iran Tries to Regulate Cryptocurrencies

The Secretary of Iran’s Supreme Council of Cyberspace, Abolhassan Firouzabadi, recently stated that the National Center for Cyberspace is preparing a proposal for the regulation of crypto-mining, as well as the competent authorities, consider the possibility of developing a regulatory framework related to this activity.

The Iranian government has also considered launching its own cryptocurrency backed by the state, with the aim of gaining economic stability in the country. In August 2018, the draft of the government-backed project was ready. Currently, it waits for further instructions from Iranian President Hassan Rouhani.

Haeri insists that electricity bills for the cryptocurrency-mining sector must have a special price. This amount would be similar to the rates established for energy exports. This is an aspect that the government will probably study, whilst it warns cryptocurrency miners to control the excessive consumption of electricity.

By María Rodríguez

Catalonia Will Have Seven Public Services Based on Blockchain

Maria Rodríguez
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Catalonia Will Have Seven Public Services Based on Blockchain

A data system for organ donors is one of the proposals that the region seeks to implement

The Government of Catalonia recently approved a plan to incorporate blockchain technology in public administration. A total of seven public services could operate in that region, in the near future, according to local media.

The project is called “Blockchain Strategy” and consists of seven proposals to develop citizen participation networks and public services based on blockchain technology.

This plan was suggested during the second half of last year, after the Government of Catalonia approved the implementation of blockchain technology in its administrative processes in order to improve efficiency and innovation.

Up to now, the Catalan authority does not specify what types of blockchains (public or private) it will use to develop these public services. Due to this, it is still unknown if these networks will work with public blockchains such as Bitcoin or Ethereum, or rather with private blockchains governed by the State.

Digital Identity, Communications, and Waste Collection

One of the blockchain developments that will take place in Catalonia is an identification system where all the data of the residents can be verified in a blockchain platform. This proposal will generate a digital identity for all citizens of that region.

One of the main advantages of this strategy is that it contemplates the development of a digital consent registry, which will allow citizens to access the provision of a public good or service. The creation of a channel of communication between the Parliament and the Generalitat is another proposal of the authority.

Blockchain technology will also be used to improve recycling processes. It is expected to certify garbage and toxic waste. With this, the government seeks to monitor the mobilization of waste and plans to execute a system to manage waste throughout the territory.

Organ Donation and Electricity Commercialization

Hospitals and healthcare centers in Catalonia will enjoy two different services based on Distributed Ledger Technology (DLT). The first one is a data system for organ donors, which will record biological indicators on a blockchain system that different hospitals will share. The second one will allow users to share their medical record with a third party.

These developments for the health area, mostly in the case of the data system for organ donors, would help hospitals to have access to this vital information in a safe manner, in order to know where a patient needs an organ and in which hospital could be located a donor.

Another important blockchain plan that the Government of Catalonia prepares is the commercialization of electricity among citizens. Last year, authorities in the region announced that they would work with the Ethereum blockchain to allow energy transactions between different households. This project is still in process.

Catalonia is one of the territories compromising with the development of the cryptocurrency market and also with blockchain technology. The region plans the launch of a Catalan cryptoactive and the certification of residences using blockchain systems.

The new blockchain macro-project will strengthen the adoption of this technology as a mechanism to reinforce the current work and achieve efficiency in the development of crucial processes in different areas of development.

By María Rodríguez

You Have Been Warned! Germany’s Watchdog BaFin Recommends Caution Regarding CoinBene

Andres Chavez
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You Have Been Warned! Germany’s Watchdog BaFin Recommends Caution Regarding CoinBene

Using unlicensed platforms and ecosystems is a very risky proposition for traders and investors of all locations, and should be avoided at all costs. There must be one or several reasons behind the fact that they have not sought or received an official license to perform their operations in a specific country.

Financial regulators of nations in which these platforms perform their operations are constantly looking to let the public know about the risks of doing business with them and let alone investing valuable resources. Such is the case of Germany, which has warned people through the Federal Financial Supervisory Authority (BaFin) about crypto exchange CoinBene.

Recruiting Freelancers and Paying them on Commission

The financial regulatory organization of the mentioned nation issued an official warning this week, specifically stating that the project in question, named CoinBene, is currently recruiting freelance crypto traders and they will, allegedly, get paid on commission, which sounds bad enough to begin with.

According to BaFin, crypto assets are recognized in Germany as financial instruments, and engaging into trading operations requires due authorization under the respective organism, in this case, Germany’s Banking Act, or Kreditwesengesetz (KWG).

In the same vein, BaFin clearly states that CoinBene is not a legitimate project because it is not listed in the country’s commercial register, whilst also failing to secure the proper licensure for trading these assets as the KWG requires. People using its services and products are, therefore, setting themselves for augmented risk and, ultimately, disappointment.

Denying the Claims

On the other hand, the company has answered inquiries in pat days when it comes to its presence in the European nation. To that effect, it has used its official Twitter account to completely deny that it is recruiting freelancers.

“We received numerous inquiries regarding our alleged hiring in Germany. But CoinBene is not planning to open any office nor hiring any representative in Germany. Nonetheless, we would like to thank those who actively reached out to us for your concern and understanding,” the project wrote on the microblogging site.

People in the industry suspect that CoinBene is being used to cover up a hack, and, of course, the crypto exchange has adamantly denied those accusations by saying that the flow of outgoing resources was due to ongoing and continuous maintenance.

A Top-10 Crypto Exchange

At the moment of writing this piece, CoinBene was comfortably in the top 10 in the ranking of crypto exchanges by adjusted trade volume, checking in at the eighth spot, according to the data center of CoinMarketCap. The firm’s trade volume is approximately $1.63 billion, which is fairly significant.

Analysts at Elementus, a blockchain infrastructure company, revealed that whilst findings of an investigation were not enough to refure CoinBene’s claims, by examining the outgoing transactions, they could see details that were also common in a hack.

The current CEO of HowDoo, David Brierley, says that he lost roughly $209,000 (approximately 18.4 million uDOO) in the process, and is looking to file a suit against the exchange in question.

By Andres Chavez

IFM Predicts that Central Banks Will Issue their Own Digital Currencies

Maria Rodríguez
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IFM Predicts that Central Banks Will Issue their Own Digital Currencies

The development would benefit emerging economies and unbanked people

Whilst the boom of digital currencies causes some banks to fear to lose their monetary policies, others seem interested in creating their own cryptocurrencies to conduct digital transactions and respond to the demands of their users. During this debate, and given the characteristics of the projects presented until now, the International Monetary Fund (IMF) considers that central banks will issue their own digital currencies in the future.

The financial entity issued its opinion recently through a statement. According to the document, the IMF and the World Bank conducted a survey related to Financial Technology (FinTech) that requested responses from the financial institutions of all its member countries. The IMF’s conclusions are based basically on the 96 responses it received.

Countries Looking Forward to Launching their Digital Currency

According to the document, several central banks of different countries are considering the possibility of implementing some type of Central Bank Digital Currencies (CBDC). Reportedly, Uruguay has already launched a CBDC pilot program, whilst the Bahamas, the Eastern Caribbean Currency Union, Sweden, and Ukraine are “ready” to test their systems.

The report also details that several central banks have been conducting research related to aspects such as the potential impact of CBDCs on financial stability, the structure of the banking sector, the opportunity of non-banking financial institutions and the transmission of monetary policy.

The reasons to offer a CBDC varies, according to the report. It explains that both emerging economies and developed economies are considering the options of the CBDC since it tries to offer an alternative to cash as its frequency of use decreases.

Benefits for Emerging Economies

For the emerging markets of developing countries, the main result of applying CBDC would be the reduction of bank costs, as well as the possibility that banks are more accessible to citizens who do not have bank accounts.

The IMF report also concludes that most central banks are not interested in issuing an anonymous CBDC. These institutions want to allow the authorities to track transactions when necessary. However, some banks are considering to divide a subset of reserved tokens in order to make transactions verifiable.

A few months ago, IMF President, Christine Lagarde, recommended the creation of digital currencies as a way for states, through central banks, to “provide money to the digital economy”.

Development Projects

Up to now, wholesale CBDCs, comprised of restricted access digital settlement tokens, have been implemented through concept tests for applications based on Distributed Ledger Technology (DLT).

Examples of wholesale CBDC projects include UBIN, which consists of issuing a national cryptocurrency in Singapore for all affiliated banks that achieve digitization of the Singapore dollar, and Jasper, which aims to show how DLT could transform the future of payments in Canada with the issuance of the CADcoin token.

Recently, the Central Bank of Paraguay warned investors and the public in general that cryptocurrencies, whilst they are not issued by a Central Bank, have no legal value. This means that the financial institution is not responsible, so far, if these means of payment are successful or not.

The process of adoption of cryptocurrencies and the decisions related to them, continue changing, and it is difficult to predict. Users continue alert at the expectation of cryptocurrencies regulation progress.

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

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