Tuesday, January 22, 2019

Bank of England adviser tells Bloomberg that cryptos fail fundamental financial tests

Crypto Market Recap

  • Cryptocurrencies are mostly higher in midday trading as the price of Bitcoin (BTC) is 0.90% higher in the last 24 hours to USD$3,612.13.  Bitcoin Cash (BCH), EOS (EOS), and TRON (TRX) are leading the gains in major coin today, all up more than 5% to USD$129.51, USD$2.48, and USD$0.026568, respectively. Ripple (XRP) and Binance Coin (BNB) are lagging major coin in today’s trading, meanwhile, down 0.29% and 0.71% to USD$0.319089 and USD$6.49, respectively.

Crypto Developments in Financial Services

  • US-based crypto exchange Coinbase has launched cross-border wire transfer services via the SWIFT network for high-volume Coinbase Pro and Prime users in Europe and Asia, according to an official announcement Tuesday. Additionally, the post details that, “select Coinbase Prime customers globally will also have access to our US and European over-the-counter (OTC) trading desks and Coinbase Custody.” Coinbase Custody is a service mainly for institutional customers that stores large amounts of cryptocurrencies.  
  • The London Stock Exchange Group confirmed in an official post on Tuesday that its Millennium Exchange trade-matching technology will power AAX, a new crypto exchange venture launched by Hong Kong-based ATOM Group. AAX will reportedly launch in the first half of 2019 and aims to provide a, “scalable,” and, “compliant,” cryptocurrency trading platform, according to ATOM Group. AAX will be the first cryptocurrency exchange to use the London Stock Exchange Group’s Millennium Exchange trade-matching technology.  
  • Bakkt, the long-awaited cryptocurrency platform venture by the Intercontinental Exchange, announced in a Tweet on Tuesday that is in search of a number of high-ranking positions. The tweet by Bakkt contains vacancies for eight different high-ranking positions, including a director of blockchain engineering, a blockchain developer, a director of security engineering, and a senior full stack engineer. Bakkt is hiring for US positions in Atlanta and New York City and international positions in Hong Kong, Tokyo, San Francisco, London, Tel Aviv, and Singapore.

Crypto Regulatory Environment

  • A new report published by the Bank for International Settlement (BIS) finds that problems in Bitcoin (BTC) will only be solved if the network departs from a proof-of-work (PoW) verification protocol. As per the report published on Monday, “Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality.” The report goes on to discuss that, although second-layer network solutions like the Lightning Network may help scaling, “the only fundamental remedy would be to depart from proof-of-work.” The report notes that such a departure from PoW would likely come from social coordination or institutionalization.  
  • De Nederlandsche Bank (DNB), the Dutch central bank, and the Netherlands Authority for the Financial Markets, the country’s financial regulator, are planning a regulatory framework that could introduce a licensing scheme for domestic cryptocurrency exchanges and wallet service providers. A joint report published by the two Dutch authorities cites, “high financial crime risks,” as reasoning for the licensing scheme pertaining to domestic cryptocurrency industry.  
  • Huw van Steenis, a senior adviser to Bank of England (BOE) Governor Mark Carney, said in an interview with Bloomberg on Monday that cryptocurrencies fail fundamental financial tests. Van Steenis, who boasts tenure at Schroders and Morgan Stanley, responded when asked about the potential threat cryptos pose to economic stability, “I’m not so worried about cryptocurrencies. They fail the basic tests of financial services. They’re not a great unit of exchange, they don’t hold value, and they’re slower.”

General Crypto News

  • A report published by crypto analytics firm Diar indicates that on-chain Ethereum (ETH) transaction value hit an all-time high in December 2018. Users conducted transactions worth 115mm ETH in December 2018, the largest monthly total excluding activity following a hard fork caused by a DAO hack in 2016. The US dollar value of ETH on-chain transactions in December 2018, however, recorded a 22-month low of USD$815mm, down from USD$1.1bn a year prior.

Sources:

https://bitcoinist.com/bank-of-england-cryptocurrencies-threat-not-worried/ 
https://bitcoinist.com/bis-bitcoin-depart-proof-of-work/ 
https://bitcoinist.com/london-stock-exchange-confirms-tech-sale-to-hong-kong-cryptocurrency-exchange/ 
https://blog.coinbase.com/announcing-new-features-and-services-to-make-trading-easier-for-high-volume-customers-in-asia-and-57a30ad08e2f?gi=fa5d40da3c9f 
https://coin360.io/  
https://coinmarketcap.com/  
https://cointelegraph.com/news/a-glimpse-into-the-future-what-happens-when-there-are-no-more-bitcoin-to-mine 
https://cointelegraph.com/news/bank-of-england-adviser-cryptocurrencies-fail-basic-financial-tests-lack-value 
https://cointelegraph.com/news/ethereum-on-chain-transaction-volume-reached-record-high-in-december-2018 
https://cointelegraph.com/news/major-central-bank-institution-bis-bitcoin-must-depart-from-proof-of-work 
https://cointelegraph.com/news/nyse-operators-long-awaited-crypto-platform-bakkt-announces-new-key-vacancies 
https://cointelegraph.com/news/vulnerability-is-found-in-constantinople-hours-after-eth-devs-call-it-least-eventful-hard-fork 
https://twitter.com/Bakkt/status/1087729490522972163 
https://www.bakkt.com/careers 
https://www.bis.org/publ/work765.htm 
https://www.coindesk.com/coinbase-adds-cross-border-wire-transfers-for-whales-in-europe-and-asia 
https://www.coindesk.com/dutch-financial-authorities-plan-licensing-scheme-for-crypto-exchanges 
https://www.coindesk.com/london-stock-exchanges-trading-tech-to-power-new-crypto-exchange 
https://www.dnb.nl/en/binaries/Crypto%20Uk\_tcm47-381603.pdf?2019012109 
https://www.lseg.com/resources/media-centre/press-releases/lseg-technology-selected-atom-power-aax-digital-asset-exchange 
https://www.newsbtc.com/2019/01/22/binance-crypto-and-blockchain-event-in-singapore-a-resounding-success/


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