Highly-skilled hackers are going after the crypto industry. Take it from Coinbase. In June we had a Loose Change item from ZDNet, which reported that hackers had targeted Coinbase employees with an attack designed to exploit zero-day vulnerabilities in Mozilla's Firefox browser. The exchange's security team detected and blocked the attack before it could achieve its objective. Today, chief information officer Philip Martin published a detailed, technical blog post describing the attack and his team's response. Martin also spoke with me about what he sees as the broader implications of the attack. In short: cryptocurrency companies should be ready to fend off attackers with capabilities on par with nation state-sponsored hackers. Read more here.
The Fed is going to revamp how American pay for things. Big banks aren't happy. America's central bank has announced that it will create "FedNow," a system that will allow real-time bank-to-bank payments, all day every day. (The system the central bank runs now closes on the weekends and can take several days to settle payments.)
The Fed took years to decide whether it wanted to create its own payments system or leave it up to commercial banks. Those banks, which have already invested $1 billion into an instant payment platform that launched in 2017, say they built their system under the assumption that the Fed would not build its own. They worry that a public-sector competitor will have an advantage in the payments marketplace.
But the big banks' service, called the Clearing House, has been slow to reach smaller banks. "FedNow will be accessible to all banks, no matter the size," Federal Reserve governor Lael Brainard said during a speech this week in which she announced the project. "Given our long-standing service connections with more than 10,000 banks across the country, the Federal Reserve is uniquely placed to deliver this outcome."
People who live paycheck to paycheck often need access to their money sooner than is possible in the current system. That's one reason that Americans spend tens of billions every year on overdraft fees, payday lending, and check-cashing services. Real-time payments would help them avoid such expenses. The technology is already available—instant payment systems are up and running in many countries around the world. (Services in the US like Venmo and Paypal rely on the existing payment infrastructure.)
Big Chinese tech companies Alibaba and Tencent already operate popular instant payment systems. In the US, Facebook has proposed one, called Libra, which would be based on a digital currency. "Facebook's Libra project raises numerous concerns that will take time to assess and address," Brainard said. "But one thing is clear: consumers and businesses across the country want and expect real-time payments, and the banks they trust should be able to provide this service securely—whatever the size." Okay, but that's going to take a while—the Fed aims to launch the new system in 2023 or 2024.
What technology will the Fed use? We don't know yet. Twitter watchers noted that Dilip Rao, Ripple's global head of infrastructure innovation, seemed particularly excited about the announcement. Rao later asked his followers not to read into his comments, though, tweeting: "My role gets me excited about payments infrastructure—boring to most!"
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Loose Change
Fill your pockets with these newsy tidbits.
- Walmart has applied for a patent for a digital currency that sounds a bit like Facebook's Libra. (CoinDesk)
- IBM has announced a new supply chain-focused blockchain network that includes Anheuser-Busch Inbev, Cisco, GlaxoSmithKline, Lenovo, Nokia, Schneider Electric, and Vodafone. (Reuters)
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Helium, a startup aiming to build a low-power wireless network that uses a blockchain to incentivize participants to provide coverage, has launched a test network in Austin. (Decrypt)
+This company hopes its cryptocurrency can help the internet of things reach its true potential (TR)
- Coinbase is mulling the addition of eight more digital currencies to its platform. (Coinbase)
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Data protection officials in the US, EU, UK, Australia, and Canada have said in a joint statement that they are "surprised and concerned" at the lack of detail that Facebook has provided about how it will protect Libra users' information. (Financial Times)
- Apple won't allow users of its new credit card to buy cryptocurrencies with it. (Reuters)
- According to a local news report, the Seoul Metropolitan Government will soon launch a blockchain system that will pay citizens cryptocurrency for civic participation. (CoinDesk)
- Binance, the world's largest cryptocurrency exchange by volume, says it will provide a reward of 25 bitcoins (around $290,000 at the time of writing) for information that will help them figure out who is blackmailing them. (Bloomberg)
