BitDigest - Friday October 4, 2019
Cryptocurrencies appear to have stabilized across the board and are slightly higher on the week with the total marketcap of all digital currencies gaining $5 billion
Japan issues warning to funds looking to add crypto to their holdings
Venezuela takes steps to drive crypto adoption by issuing credit cards
The Headlines
Japan's Regulator Issues Draft Guidelines for Traditional Managers Investing in Crypto
Japan’s financial watchdog, the Financial Services Agency (FSA), has issued draft guidelines to funds investing in digital currencies. Recognizing that funds will eventually invest in virtual assets, the FSA advised managers to exercise caution when investing in assets outside the original objective of their mandates and to evaluate potential risks, such as those relating to volatility and liquidity. It does not specifically specific virtual assets but refers to the worrying investments as “non-specific assets.”
Venezuelan Issuing Crypto Supported Credit Card and Point-of-Sale System
Venezuela’s state sanction digital currency exchange is releasing a debit card and point-of-sale system to drive adoption of the nation’s oil-backed digital currency. The system will provide support not only for the petro, but also for bitcoin, ether and dash.
Ohio Temporarily Halts Payment of Taxes with Bitcoin
The Treasurer of the State of Ohio has temporarily ended the ability for its citizens to pay taxes with digital currencies. Ohio Treasurer Robert Sprague questioned whether the OhioCrypto.com processing system characterized them as a “financial transaction device” and therefore should have been selected through a competitive selection bid. “Until a formal opinion is issued by the Attorney General, I feel it is prudent to suspend the website” he said.
DFS Expanding Virtual Currency Team
The New York Department of Financial Services is looking to hire a Deputy Superintendent for Virtual Currency, a new position tasked with providing expertise to support policy decisions and the regulation of emerging and innovative markets, including virtual currencies and virtual currency markets and businesses. Selection of a final candidate is pending budget approval.
PayPal Concerns About Libra's Regulatory Fallout
PayPal did not attend the Libra meetings in Washington yesterday and the Financial Times is reporting the they payment processor may put their membership in the Libra Association on hold. It is being suggested that PayPal is concerned with the lack of regulatory pre-work Facebook completed and a fear that the global regulatory pushback could impact its other operating businesses. While PayPal may not initially sign up as expected, they have not formally issued a statement and may still join the Association as one of the founding 100 members.
Vanguard Looking to Trade Currencies on Blockchain
The Vanguard Group, the investment management company with over $5 trillion in asset under management, is looking to Symbiont, a blockchain developer to find a new way for assets managers to trade currencies. The company has been testing a new blockchain for the past two months in an effort to provide direct trading possibilities and lower total costs.
Market Data
Bitcoin Gains Depend on Tether Issuing Blockchain
Reports are finding that new issuances of tether (USDT) are driving bitcoin prices, but the impact of the increase varies based on the issuing blockchain platform. TokenAnalyst found that the price of bitcoin increases 70% of the time when tether is issued on ethereum, but only 50% of the time when USDT is is issued on Omni. “I think the discrepancies are appearing recently primarily because Tether on ERC-20 is just much easier than Tether on Omni to use as a means of transferring value quickly,” said Sid Shekhar, co-founder of TokenAnalyst. “Ethereum is a speedier chain than Bitcoin. As Tether is primarily used as a way to realize gains and get in and out of volatile crypto-asset positions in times of market movement, the speed of transferring into/out of it is critical.”
Exchange and Product News
Chainalysis Launching Support for Addition Tokens
Chainalysis has launched an on-demand compliance and investigation software platform for ERC-20 tokens. The blockchain analysis company said support for Basic Attention Token (BAT), Dai, GoldX, Maker (MKR), OmiseGO (OMG), and 0x will begin this month. They are planning to add support for 23 additional digital currencies including XRP, Dash, ZCash (unshielded), Doge, and Ethereum Classic (ETC) by the end of the year.
OKEx Launches SRO for Crypto Exchanges
OKEx has launched an initiative to create a Self-Regulated Organization (SRO) aimed at standardizing exchange practices and policies. The Malta based exchange plans to engaging exchanges and other market participants in the global crypto-trading community to become members of this initiative. The SRO will be an independent, membership-based organization that is neutral and open to exchanges of all sizes and jurisdictions the company outlined.
www.institutionalassetmanager.co.uk
Ripple Air Dropping $2.5 million
CEO Brad Garlinghouse has announced that Ripple is initiating the semi-annual airdrop pool of 10,000,000 XRP ($2.53 million) to Ripple users. To receive your free XRP go to the following link. Garlinghouse said this was a pay to celebrate the global power of XRP and thank the community (and circulate more tokens).
Binance Partners with AML Platform to Meet FATF Rulings
Binance has announced a new partnership formed to address the recently issued guidelines on anti-money laundering (AML) rules by the Financial Action Task Force (FATF). Binance will integrate Coinfirm’s blockchain-agnostic AML Platform into its cryptocurrency exchange ensuring secure trading for its customers and compliance with the FATF’s guidelines to cryptocurrency exchanges around the world.
New Bitcoin Futures Investment Offering
Stone Ridge Asset Management is the latest company to attempt to register a bitcoin futures vehicle with the SEC. The New York based investment manager has filed a form N-2 seeking approval to issue a close ended fund investing in bitcoin futures contracts. The fund only plans to invest in cash settled BTC futures traded on US registered commodity exchanges.
Thoughts on the Ecosystem
Tim Cook does not believe companies should attempt to gain power by establishing native digital currencies. The Apple chief executive said his company would not be developing their own digital currencies. I really think that a currency should stay in the hands of countries. I’m not comfortable with the idea of a private group setting up a competing currency,” he said, adding “currency, like defence, needs to stay in the hands of countries, that’s the heart of their mission…We elect our representatives to assume their governmental responsibilities. Companies aren’t elected and should not be going in this direction.”
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BitDigest is a weekday news update on digital currencies and blockchain technology for friends and partners of Parsons & Whittemore, a single family office based in Rye Brook, New York. Receipt of BitDigest is by approval of the Author. The commentary, analysis, opinions and recommendations in this newsletter represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in this newsletter is obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. Neither the Author nor any of the Author's affiliates make any guarantee or other promise as to any results that may be obtained from reading this newsletter. While past performance may be analyzed in this newsletter, past performance should not be considered indicative of future performance. No reader should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. The Author is not making a solicitation or offer to buy or sell any securities of any kind.