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Financial Institutions Use Stablecoins to Shake Things Up in 2020

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For most people, the word “stablecoin” brings to mind cryptocurrencies like Tether or Libra. However, there are many versions of stablecoins — ranging from those that are backed by fiat money to those that are backed by real assets or even other digital currencies.

Simply put, a stablecoin’s main aim is to solve the problem of volatility by being a digital asset that is tied to another asset with a stable value.

The new year is already turning out to be an exciting time for stablecoins as interest among financial institutions picks up speed. There is talk of companies like Wisdomtree, a New York-based asset manager and leader in exchange-traded funds with over $68 billion in assets under management, mulling over plans to launch a regulated stablecoin.

Likewise, governmental financial institutions are now coming out of the woodwork, stating that they will either be researching or discussing a stablecoin as a potential solution. International entities, such as the G-7 Working Group in partnership with the International Monetary Fund and the Bank for International Settlements, have released a report investigating the impact of stablecoins.

Furthermore, banks such as Banco Bradesco, Bank of Buscan and Rizal Commercial Banking Corporation jumped on the stablecoin bandwagon last year in a move to issue their own stablecoins on IBM’s blockchain.

WisdomTree

News about WisdomTree’s plan to launch a regulated stablecoin has had many in the crypto space speculating about a buildup in competition for dominance in the space. For WisdomTree, the move is believed to be a natural extension of its ETF business.

According to the company’s director of corporate strategy, William Peck, “a regulated WisdomTree stablecoin could look similar in structure and purpose to an ETF backed by dollar-denominated assets like short term U.S treasury bonds.”

Related: WisdomTree Grows a Stablecoin Today to Nurture a Crypto ETF Tomorrow

Peck further added that this option could appeal to crypto traders, since the stablecoin would be powered by blockchain. In the long run, Peck believes that a regulated stablecoin issued by WisdomTree could position the firm as a leader in a fast-evolving industry.

For stablecoin issuers in the United States, one of the biggest hurdles is the reception from regulatory authorities. However, the story might be a little different for WisdomTree, given that the firm is a regulated money manager. Therefore, a proposal from the asset manager is more likely to receive a better reception from regulators.

Furthermore, since it stands among industry giants like BlackRock and Fidelity, WisdomTree can bring about an enterprise-level approach to the crypto industry. Although WisdomTree has yet to file a public and official proposal with the relevant authorities, the firm has already shown enough interest in the space, with reports of the firm being a leading investor in a new startup called Secucurrency, a company that ensures regulatory compliance on blockchain systems.

State Street

Another American financial Services company that is slowly but surely dipping its toes in the stablecoin universe is State Street. Last month, the company announced its plans to launch the pilot phase of a digital asset in collaboration with Gemini Trust.

The plan is to combine State Street’s back-office reporting with Gemini’s research on digital assets to enable users to consolidate their traditional assets serviced by StateStreet with that of their Gemini-processed digital assets.

Founded by the Winklevoss twins, Gemini Trust is one of the pioneering issuers of regulated stablecoins. According to their white paper, Gemini (GUSD) is a regulated stable value coin that is built on Ethereum and pegged 1:1 to the U.S. dollar.

In the announcement of the firm’s plans to venture into the crypto space in partnership with Gemini Trust, State Street’s Managing Director Ralph Achkar said, “The digital asset space is still in its nascent stage, yet it promises opportunities that could fundamentally impact how StateStreet does things in the future.”

Related: The Unstoppable Trajectory: Stablecoins Are Evolving Traditional Finances

Just like WisdomeTree, StateStreet admits that its new project is nothing more than a natural extension of the services it offers its clients. The financial services provider boasts $32.9 trillion in assets under custody and almost $3 trillion in assets under management.

Although the move by StateStreet is not directly linked to Gemini’s stablecoin, it is still a clear sign that the financial firm is taking steps to help clients invest in digital assets. According to Achkar, “the digital asset space is something that will impact the market going forward and we want to be there when this happens.”

IBM in partnership with several international banks

In March 2019, IBM announced the launch of its global payment network that includes payment location in 72 countries with 44 banking endpoints. The tech giant signed partnerships with Banco Bradesco, Bank Busan and Rizal Commercial Banking Corporation to enable them to issue stablecoins on IBM’s blockchain network.

Unlike most companies in the stablecoin landscape, IBM is not the issuer of the stablecoins. However, the banks it partners with have signed a letter of intent to issue their own stablecoins with support for multiple fiat currencies.

According to Jesse Lund, the vice president of IBM Blockchain, IBM has “created a new type of payment network that is unique in the sense that it streamlines the ability of businesses and consumers to move money around the world in real-time.”

Lund further added that the company is “covering a brand new network in 72 countries that will support pay-in and payout endpoints in 48 currencies.”

The Central Bank of Russia

At the tail-end of 2019, Russia’s central bank started testing the idea of utilizing a stablecoin. Unlike most fiat-based stablecoins, these would be pegged to real assets and put in a regulatory sandbox. According to Elvira Nabiullina, the head of the Russian Central Bank, the purpose of testing out the stablecoins is not necessarily to have them be used for making payments.

However, the plan is to come up with a “special set of rules that allows innovative companies to test their products and services” in a limited environment without the risk of breaking financial laws — commonly known as a sandbox.

Nubiullina also pointed out that the project will enable the central bank to learn “the potential uses of stablecoins” as it continues to explore the possibility of issuing its own central bank digital currency.

Although Russia is making moves to learn more about stablecoins, Nubiullina made it clear that the official stance of the government is against private money and that the Central Bank of Russia cannot support digital currencies that are designed to substitute for private money.

Central bank of France

France is also planning to launch a pilot project to test a cryptocurrency designed for financial institutions. While speaking to a news conference in Brussels, Governor François Villeroy de Galhau said that the country’s central bank plans to begin testing the digital euro project by the end of the first quarter of 2020.

The digital euro will solely be aimed at private financial players in the country to strengthen the French financial system. The official report also stated that the main focus of the pilot project is to establish France as a global leader of central bank-issued digital currencies.

Earlier on, France and Germany were skeptical of Facebook’s Libra project, saying that the project posed risks to Europe’s financial sector. Now, it’s clear that their plan was to launch a common set of rules for virtual currencies in the Eurozone.

Although it will take time to develop a regional stablecoin, French Finance Minister said, “The fact that it is for the long term does not prevent us from working and having results next year.”

China’s digital yuan

Another central bank poised to become one of the first to issue its stable digital currency is the People’s Bank of China. Amid a swiftly digitizing economy, the Chinese central bank’s move is an attempt to manage the technological change to its terms. One official of the PBoC told Bloomberg that the move goes beyond economic issues to include issues of sovereignty.

Although the PBoC plans to launch a digital yuan, it is not necessarily going to be a cryptocurrency. First of all, unlike decentralized cryptocurrencies, the digital version of the Chinese yuan will be fully backed by the PBoC. This means that the digital yuan won’t have any presumption of anonymity.

Also, given that records of China’s payment traffic peak at about 92,771 transactions per second, central bank officials in China are skeptical about blockchain’s capacity to support such traffic.

Even though China is already a highly cashless society, the move to launch a digital yuan will protect the country from having to adopt other increasingly popular digital currencies like Bitcoin. PBoC’s plans are also in line with the government’s agenda of countering the strengthening dollar especially in the wake of trade wars and the rise of multiple stablecoins backed by the U.S. dollar.

Where does the stablecoin stand?

So why are all these financial institutions, central banks and companies embracing the idea of stablecoins? Biser Dimitrov, co-founder of BlockEx digital asset platform told Cointelegraph that “stablecoins just make sense for any type of financial services company,” adding:

“For example, in a retail or investment bank, a stablecoin can facilitate faster intra-day settlements, full transparency. More to that, a bank can offer better and faster services on top of a blockchain network with a stablecoin and enable things like loyalty points conversions, faster mortgages and generally efficient loan origination process.”

However, with increased adoption of stablecoins comes the challenge of regulation, and Gregory Klumov, CEO and co-founder of Euro-backed stablecoin Stasis, believes there is a solution. Klumov told Cointelegraph that regulation will first evolve in the retail space before coming to the e-money directive:

“In the private corporate space nobody will regulate what solution particular corporation utilizes. A good analogy could be antivirus or project management software. The core value of any stable asset is fungibility. The more counterparties support it, the more network effect it will achieve.”

But as much as the issue of regulation can be a problem for stablecoins, Dimitrov believes that for 90% of issued stablecoins, regulation will be more relaxed in the future, as the developed assets will be used for internal purposes.

Source: https://cointelegraph.com/news/financial-institutions-use-stablecoins-to-shake-things-up-in-2020

Blockchain

PewDiePie Is Guilty of Every Attack He Hypocritically Aims at Jake Paul

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  • PewDiePie trashed fellow YouTuber Jake Paul’s new financial freedom courses in a recent video.
  • But Felix is guilty of shilling sketchy financial products too.
  • To top it off, PewDiePie gives financial advice in the video, while criticizing Jake Paul for not having any credibility to give financial advice.

PewDiePie wasn’t back on YouTube for long before running out of ideas for original content. So he piggy-backed off another YouTuber’s original work instead.

His response video to Jake Paul’s financial freedom movement isn’t the first time Kjellberg has attacked his fellow YouTuber’s efforts to make the world a better place. The king of gaming YouTube has a longstanding beef with both Jake and Logan Paul.

jake and logan pauljake and logan paul
PewDiePie has a longstanding beef with the Paul brothers. | Source: Michael Reaves/Getty Images/AFP

Last year, he even stooped as low as bashing Jake Paul’s petition to end cyberbullying.

PewDiePie has expressed consternation in the past with a media that nit-picks over his channel and allegedly blows anything negative out of proportion.

But he’s doing the same thing to Jake in this recent video.

Felix Shilled Scammy Cryptos

Just last month, Felix shilled sketchy cryptocurrency projects to his audience for affiliate revenue at the beginning of a video.

He even acknowledged with a joke how greedy it was to include an ad in a video that already had ads on it:

Many people have lost millions to crypto scams in the last decade while hoping to get rich. PewDiePie leveraged his fame and the trust of his fans to push more scammy cryptos. Yet he criticizes Jake Paul for encouraging people to educate themselves about finance and business.

He even made fun of another shady crypto scam in 2018, before selling out to TRON, BitTorrent, and DLive.

PewDiePie Mocks Jake Paul for Giving Financial Advice… Then Gives Financial Advice

As if that weren’t astounding enough, PewDiePie is actually guilty of what he slams Jake Paul for within the same video that he upbraids Paul. It’s unbelievable.

Pewds mockingly says:

Yes, Jake Paul is the person I look at when I envision financial freedom.

Then laughs.

But why not?

pewdiepie, jake paulpewdiepie, jake paul
PewDiePie is more like Jake Paul than he wants to admit. | Source: PewDiePie/YouTube

Paul is in his early 20s, and he’s a multi-millionaire. That actually makes him at least credible, if not authoritative, as a source of business and financial advice.

While PewDiePie doesn’t think Paul’s YouTube success translates to financial savvy, he instantly turns around and starts giving financial advice:

Student loan is the cheapest loan you can ever get. It’s one of the most fair loans. It’s a great loan to actually take advantage of.

That was in response to Jake Paul criticizing student loans for costing so much and not delivering students the earning power that would make them worth it.

But Jake Paul is right. And PewDiePie is wrong.

Job pay hasn’t kept up with the ballooning costs of loan-financed college education. And one markedly unfair aspect of student loans is they are notoriously difficult to discharge in bankruptcy.

PewDiePie concludes:

Jake Paul is the kind of celebrity that doesn’t have any real value… You could replace Jake Paul with anything or anyone and it wouldn’t make a difference.

Honestly, how special is it to play Minecraft and laugh at memes?

PewDiePie is even more “guilty” than Jake Paul of this final criticism.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

This article was edited by Josiah Wilmoth.

Source: https://www.ccn.com/pewdiepie-is-guilty-of-every-attack-he-hypocritically-aims-at-jake-paul/

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Caitlin Long Starts the First Crypto-Native Bank in the U.S.

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Caitlin Long, a former Wall Street executive who has helped Wyoming enact 13 blockchain-enabling laws, is taking advantage of the progressive Wyoming legislature to establish a first crypto-native bank in the U.S. The bank’s name is Avanti, which means “forward” in Italian.

Long made this announcement earlier today in a series of 29 tweets. She believes that “a critical piece of U.S. market infrastructure is missing – a regulated bank that can act as a bridge to the Federal Reserve for payments and [offer] custody for BIG institutional money.”

Long thanked Wyoming governor Mark Gordon for making this possible, as Avanti takes advantage of the special-purpose depository institution law “which is the optimal regulatory-compliant structure in the U.S. for providing financial services around crypto.” 

Cointelegraph reached out to Caitlin Long for a comment, but did not receive an immediate response. This article will be updated if we hear back.

Strict regulation

However, Long notes that this special-purpose depository law has stringent regulatory requirements. According to this law, all deposits — in the case of Avanti, crypto deposits — must be 100% reserved. Avanti will also not be allowed to use deposits for any financial operations of its own — a practice known as “rehypothecation.” Strict Know Your Customer standard must be applied. “DON’T EVEN THINK ABOUT trying to use Avanti for illegal/nefarious purposes!!!!!!!!!,” warns Long in a tweet.

Strange bedfellows

Long stated that she has had many long conversations with Adam Back, CEO and founder of Blockstream and an early contributor to Bitcoin, prior to starting Avanti. She believes that Blockstream is an “ideal partner for serving BIG institutional investors that require regulated banks to deliver them services around bitcoin in USD markets.”

However, she states that Avanti will stay “protocol neutral” and will welcome all cryptocurrencies demanded by clients. According to Long, we can also expect to see: 

STRANGE BEDFELLOWS because it’ll attract the best from the crypto & traditional worlds. I’m comfortable + have deep relationships in both worlds & I am equally comfy in NYC’s concrete canyons as in the wilds of Wyoming.”

Long expects Avanti to open its doors in early 2021. If Long is right that could lead to the influx of a significant amount of new liquidity to the market.

Source: https://cointelegraph.com/news/caitlin-long-starts-the-first-crypto-native-bank-in-the-us

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Bitcoin Price Prediction: BTC/USD Dumps Fast, Ready to Decline to $9,000?

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Bitcoin (BTC) Price Prediction – February 24

The volatility in the Bitcoin market could simply mean that the coin may either swing to $10,000 or decline to $9,000.

BTC/USD Long-term Trend: Bullish (Daily Chart)

Key levels:

Resistance Levels: $10,500, $10,700, $10,900

Support Levels: $9,000, $8,800, $8,600

BTCUSD – Daily Chart

After an erratic recovery of yesterday, BTC/USD has resumed back into a selling mode today. A few days ago, the coin topped at $10,300 and has been in retreat ever since. At the time of writing, BTC/USD is trading at $9,630, down 3.35% since the beginning of today. Bitcoin continues to narrow down towards $9,500. The downtrend is clearly shown by taking a broader technical picture using the daily chart.

Moreover, the BTC/USD price is struggling to hold a couple of important supports near $9,400. The price is likely to continue lower below the $9,300 and $9,200 support level. If there is a downside break below the $9,200 support level, the price could revisit the $9,100 support level. The bears are gaining momentum and if the price clears the $9,100 support, there is a risk of a sharp decline to $9,000, $8,800 and $8,600 support levels.

However, the Bitcoin price is now deciding below the 9-day and 21-day moving averages, where the buyers are anticipating a rebound. Meanwhile, the $10,200 and $10,400 levels may further surface as the nearest resistance levels should the $10,000 level holds. However, a strong bullish spike might take the price to $10,500, $10,700 and $10,900 levels. But presently, the stochastic RSI is within the oversold condition.

BTC/USD Medium – Term Trend: Bearish (4H Chart)

Looking at the 4-Hour chart, Bitcoin (BTC) has not yet slipped below $9,400 and is still in the loop of making a bounce back if the signal lines of stochastic RSI can make a quick turn back from the oversold zone. At the moment, BTC/USD price hovers below the 9-day and 21-day moving averages and may take time to persistently move back and touch the resistance level of $9,700. At the moment, the Bitcoin price is currently moving around $9,611 level.

BTCUSD – 4 Hour Chart

More so, should in case the buyers put more effort and energize the market, we can expect a retest of $9,800 resistance level. Therefore, breaking the mentioned resistance could also allow the bulls to test the $9,900, $10,100 and $10,300 upward. In other words, if the bears hold the price and push it downward, then the support level of $9,300, $9,100 and $8,900 may be visited as the technical indicator is entering into the oversold zone.

Please note: Insidebitcoins.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

Source: https://insidebitcoins.com/news/bitcoin-price-prediction-btc-usd-dumps-fast-ready-to-decline-to-9000/251973

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