Can Blockchain deliver security, performance and dependability for Japan’s new Payment Clearing Network?

Colleagues, Blockchain technology is about to meet once of its biggest challenges to date – the Japanese Banks' Payment Clearing Network consortium. The critical success factors include performance, security and dependability when processing of low-cost transfer of small-scale transactions using RTGS.for nine commercial banks. Fujitsu has been selected to develop the new Blockchain-based system. If this test proves successful, it will clearly distinguish Japan as a “first mover” when it comes to the industrial use of Blockchain technology among the world’s leading economies. One advantage here is the fact that all the players are Japanese owned and operated entities and may benefit from both technological and well as cultural synergies. China, South Korea and the US will closely monitor this stress test as they seek to implement comparable systems. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Does Blockchain’s DLT hold the key to Central Bank Digital Currency Adoption?

Colleagues, we have written extensively on the propensity of central sovereign banks to issue their own cryptocurrencies. The US Federal Reserve and the PBoC appear to be on opposite ends of the adoption continuum. New research published by the OMFIF (Official Monetary and Financial Institutions Forum) and IBM point us to the Occam’s razor of CBCD adoption: Distributed Ledger Technology (DLT). Download the CBDC report here. Private sector ICOs continue to rise with no end in sight. While they understand that their underlying Blockchain technology likely has bugs and security vulnerabilities, financial institutions in particular – such as JP Morgan, Fidelity, BlackRock, etc. – clearly see the benefits of trans-border remittances, increased transaction speed and lower OPEX. In aggregate central bankers have major reservations on the security and dependability of DLT. The report states that the goal is to “construct a convincing RTGS replacement that can be properly benchmarked against existing systems and meet the high standards for security, robustness, efficiency and speed.” The PBOC is hiring staff to develop its CBDC as we speak, whereas the US Fed is cautiously assessing its options. Many other central banks are somewhere in between. Our prediction: By 2023, most G20 nations will have launched their own CBDC. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Security Lies in the Balance as Blockchain’s LockBox Wallet Uses the SWAP Crypto-to-Crypto Brokerage

Colleagues, does the global cryptosphere truly need another hardware wallet? The CEO of Blockchain clearly believes the answer is yes, indeed. The firm has announced plans to begin shipping its new LockBox device this November. LockBox’s distinguishing features is that it enables the exchange between different cryptocurrencies in partnership with SWAP brokerage. The value proposition is that traders can exchange Bitcoin for Ethereum, XRP for LiteCoin, Ripple for Ether … you get the idea. Two key factors will determine the success of LockBox. First is the Total Addressable Market from “crypto-to-crypto” transfers. With a global market cap of some $209B we anticipate that roughly 10% of crypto traders will need to make such a transfer during their financial careers. Second is the infamous security challenge – how secure is the hardware wallet when connected to the Internet as well as the security of LockBox’s interface with the SWAP brokerage when making transactions. Our recommendation: Proceed with caution. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Japan’s Financial Services Agency Grants Third Party to Self-Regulate Cryptocurrencies – Is a Similar Move Likely in the US?

Colleagues, the Financial Services Agency of Japan has granted approval for the Japanese Virtual Currency Exchange Association (JVCEA) to self-regulate the exchange of cryptocurrencies. Officially referred to as a "certified fund settlement business association” (aka the Association of Certified Fund Settlement Business Operators). The scope of the JVCEA appears to encompass the definition of crypto exchanges policies, enforcement and impose unspecified penalties on violators. This surely comes as music to the ears of Coincheck, Bitbank, GMO and other exchanges based in the island nation. Bottom line: Would Japan’s self-regulation model be acceptable to the US SEC or CFTC? Answer: Not a chance. Both US regulatory bodies – while seeing the potential value of cryptocurrencies – have major reservations regarding the security of crypto exchanges, illicit activity performed on crypto exchanges (such as money laundering, contraband and the undermining of economic trade sanctions) as well as the legal categorization of digital assets as bona fide “securities” or “commodities”. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Tether and Bitcoin: David vs. Goliath – A Match Made in Hades?

Colleagues, Bitcoin without doubt is the poster children for cryptocurrencies. Despite its flaws and dramatic price decrease, since December 2017 it commands some 51% market share of the $209B global cryptocurrency value based data from CoinMarketCap. By all accounts Tether is a third-tier Stablecoin pegged to the US dollar … currently trading at 0.985 cents to the greenback. Tether does rank as the eighth largest cryptocurrency by weighted market cap with a little over 2B tokens in circulation. The central issue is whether Tether has been used to manipulate the value of Bitcoin – a $2B fiat-back Stablecoin influencing the industry leading BTC weighing in at $112B market cap. In a paper released by a University of Texas professor entitled Is Bitcoin Really Un-Tethered? The report makes a compelling case that “Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin.” A bevy of articles by respected publications including the New York Times, CCN, Coin Telegraph, Coin Desk and CryptoSlate appear to validate the U of T statistical thesis of Dr. John Griffin. The unanswered question concerns motive. We will explore this issue further and report our conclusions. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

What can the US SEC and PBoC learn from the EU ESMA regarding the regulation of cryptocurrencies?

Colleagues, while the US SEC has an ongoing debate whether crypto assets are securities or commodities, the European Securities and Markets Authority’s (ESMA) central focus is on the “transferability” of the asset. Transferable assets may fall under the jurisdiction of the ESMA’s existing Markets in Financial Instruments Directive II.  Herein we have two of the world’s three geo-economic regions with different approaches to the potential regulation of digital assets. Which leads us to East Asia – Japan, South Korea and China – which have be the vanguard of cryptocurrency adoption (ICOs, exchanges and mining). The PBoC definitely anticipates a sovereign bank-sponsored cryptocurrency in its future, however, has major reservations about the impact of digital assets in general on the price of the yuan. The Cryptocurrency Academy predicts that the world’s three geo-economic regions will resolve the regulatory ambiguity over the next 24-26 months. The fundamental question remains: Will the EU, US and East Asia arrive at similar or conflicting regulation frameworks? We will continue to scrutinize and report on regulatory developments affecting crypocurrency adoption. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

How does North Korea’s cyber warfare unit Lazarus Group use gains from crypto exchange attacks to its military?

Colleagues, under mounting political and economic pressure from the US – and to lesser extent China and Russia – North Korea’s infamous Lazarus Group appears to have cryptocurrency exchanges in the center of its radar screen. The highly respected Group-IB cyber intelligence firm reports that the DPRK was the source of some 14 cyber attacks targeting cryptocurrencies exchanges during the past one and a half years yielding $571m in illicit digital assets. Allow us to make two rather obvious assumptions: One, the cash-starved North Korean government has no viable exports other than the sale of rogue military hardware. Two, despite its economic deprivation, the DPRK funnels as disproportionate level of the financial resources it does have to the Lazarus Group’s cyber warfare ventures. These assumptions lead us to a fundamental question: How does North Korea use the crypto assets acquired by Lazarus? We believe the answer is two-fold. First, to build and acquire the country’s military arsenal. Second, the widespread and ongoing disinformation campaign needed to prop-up the ill-fated Kim political dynasty. Post a comment today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)