China's CBDC on WeChat and AliPay / SEC-Dropil / Bank of England / Cred irregularities

China confirms that its CBDC will not compete with state-backed WeChat and AliPay, China's two dominant payment apps...

Inside.com Part of   Network October 28, 2020

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Yi Gang, Deputy Governor, People's Bank of China WeChat Pay and AliPay will soon support China's DC/EP. China expectedly confirms that its CBDC will not compete with state-backed WeChat and AliPay, the country's two dominant payment apps. Terminology: Chinese fiat is internationally known by three interchangeable names: renminbi (RMB), Chinese yen (CNY), and yuan (¥). China's central bank digital currency (CBDC) is issued by the People's Bank of China (PBoC) and will be called Digital Currency/Electronic Payment (abbreviated as DC/EP or DCEP). China confirms app integrations: During his speech at the 2nd Bund Summit on Oct. 25, Mu Changchun, head of PBoC's digital currency research institute, says that residents will be able to store DC/EP within WeChat Pay and Alipay apps. The two digital payment apps have hundreds of millions of daily active users and together control 94% of China's mobile payment industry, according to iResearch. Tencent Holdings (0700.HK) operates WeChat. Alibaba's (9988.HK) financial arm, Ant Group, owns Alipay. Changchun's statement clarifies that there will not be competition between DC/EP and the two multi-trillion-dollar, state-supported technology giants. State-approved: Changchun views DC/EP (and the cryptocurrency wallets required to hold DC/EP) as separate from WeChat Pay and Alipay wallets. During the event, a fintech consultant, Wang Leilei of Kapronasia, one of Shanghai's financial industry consultancies, noted that the DC/EP pilot test in Shenzhen required citizens to download a new app to access the digital yuan. Wang pointed out that if non-Tencent/non-Alibaba wallets allocate DC/EP, users will switch to those apps out of necessity. Changchun also warned about the spread of fake digital yuan wallets. Changchun warned that fraudulent wallets could cause problems for non-technical DC/EP users. Changchun highlighted the importance of "centralized supervision" from China's central bank to ensure the success of DC/EP and clearly differentiate it from other private cryptocurrencies, such as Facebook's Libra. The PBoC has affirmed that it aims to "safeguard" China's CBDC. It recently published a draft bill that would ban all cryptocurrencies pegged to Chinese yuan. The pilot test of Chinese DC/EP will continue through the 2022 Beijing Winter Olympics.

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The head of financial technology at the Bank of England says the central bank has not yet decided to pursue a CBDC pilot. Tom Mutton, director of the fintech department at the Bank of England, said during his speech at the Bund Summit that the U.K. is still deciding whether or not to develop a digital currency. Mutton cited two significant challenges faced by the central bank. First, the bank wants to ensure that a CBDC issuance would encourage smooth operations with other money forms. Second, Mutton wants to ensure stable partnerships with other central banks and other stakeholders. After the European Central Bank (ECB) announced that it would push ahead with researching a possible digital euro, the Bank of England promised to continue its research, as well. On Oct. 9, the International Bank of Settlements published a detailed report regarding the key features of a possible European bloc CBDC. Law360

Cred has experienced "irregularities" in the handling of corporate funds and is under investigation. Cred's cryptocurrency, LibraToken (LBA), has declined 37% this week. Coindesk published findings from an email tip regarding Cred, a decentralized lending platform, lost an "unknown" amount of corporate funds due to a fraudulent activity causing various "irregularities." The Cred team reached out to law enforcement to investigate the matter, ensuring that it would not compromise personal account details. The crypto lending platform is conducting an internal accounting process to estimate the impact on its assets. The company's email cites that their legal advisors have suggested pausing the CredEarn program to stop the flow of funds to third parties. Coindesk also noted that trading platform Uphold has severed ties with Cred. As a result, customers using the platforms are unable to transfer funds. Various Uphold webpages that displayed content regarding Cred have been deleted. Cred says that it will issue another update within two weeks. Coindesk

Mythos Capital founder Ryan Sean Adams speaks negatively about Ethereum (ETH) competitors. He did not comment about Ethereum fundraising event, which was possibly "an illegal securities sale" at the time. The founder of Mythos Capital, Ryan Sean Adams, called out Ethereum alternatives as weak and susceptible to insider liquidations onto retail tokenholders in a tweet dated Oct. 27. Adams based his comments on a recently published Q3 report by Messari. Messari measured the financial incentives of cryptocurrencies based on token allocations to insiders (project team members) versus the public. Adams defended Ethereum for its "fair launch" on Twitter, avoiding earlier scrutiny by U.S. regulators during 2018. Several high market cap cryptocurrencies are defending themselves from lawsuits and criminal charges. CoinTelegraph

Jamie Dimon, JPM J.P. Morgan Chase (NYSE:JPM) announces a new business unit to focus on blockchain, Onyx. The bank said that its interbank settlement cryptocurrency, JPM Coin, is being used commercially by clients to settle international payments for the first time. JPM started using JPM Coin commercially this week. Takis Georgakopoulos, JPM's global head of wholesale payments, said that an unnamed, "major" client is using JPM Coin to settle payments. JPM has created a business unit for the crypto and blockchain division, known as Onyx, responsible for administering its blockchain and crypto activities. JPM formed Onyx with 100 representatives, according to a report dated Oct. 27. JPM introduced JPM Coin in Feb. 2019 to help the clients and customers settle bank transfers through blockchain technologies. Investor's Business Daily

QUICK HITS Coinbase's debit card launches in the U.S.  The Central Bank of Kenya revealed its plan to enter the digital currency market and has started a conversation with other national banks to plan for a dispatch of its own CBDC. According to a comment by Phong Li during an earnings conference call held on Oct. 27, MicroStrategy (NASDAQ:MSTR) continues buying bitcoin. Due to bitcoin's recent price rally, its bitcoin holdings are performing better than its actual business, which should come as no surprise to readers of this newsletter. Learn how to revamp your remote work strategy in this webinar: How to Build a Better Remote Work Experience With Less Software.* *This is a sponsored post.

Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia.  Editor Edited by Eduardo Garcia in New York. Eduardo is writing an illustrated book about climate change that will be published by Ten Speed Press, an imprint of Penguin Random House. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade.

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LIVE WEBINAR | MONDAY, NOVEMBER 2, 2020 | 11:00 AM ET Join Circle CEO Jeremy Allaire, Breakdown host Nathaniel Whittemore, and Alameda and FTX Founder & CEO Sam Bankman-Fried for the live discussion, 2nd Generation DEXs, Stablecoins and the Future of Capital Markets. Third generation blockchains and regulated stablecoins, such as USD Coin (USDC) are giving rise to the next generation of Decentralized Exchanges. Combined, this new market infrastructure offers market participants the holy grail -- insanely fast, secure and global market infrastructure to trade anything without any counterparty risk. This new market infrastructure is giving birth to new global digital dollar money markets, and forging a path for other tokenized assets. Don't miss this discussion on the quantum leaps underway and how this new market infrastructure will transform capital, and its impact on the world economy. SIGN UP TODAY WEBINAR SPEAKERS Sam Bankman-Fried | CEO and Founder, FTX Jeremy Allaire | Co-founder and CEO, Circle Nathaniel Whittemore | Host of The Breakdown   This email was sent by: CoinDesk   250 Park Avenue South New York, NY, 10003, US   Want to change how you receive these emails? update your preferences or unsubscribe from this list

Bitcoin Is Less Profitable to Mine Than Ever

PLUS: ConsenSys joins CBDC pilot, a16z hires BitLicense chief and more

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October 28, 2020 Sponsored by By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Top shelf Bitcoin's hashrate is soaring. Ethereum incubator ConsenSys has signed on to another CBDC pilot. JPMorgan unveiled a revamped interbank transfer blockchain network that could challenge SWIFT.   Lower profits Bitcoin mining profitability is at all-time lows in 2020, spurred in part by new ASIC mining machinery driving up the network’s hashrate. While bitcoin's hashrate has taken a dip as China's wet season comes to an end, mining professionals predict this will only be temporary, and it has only improved profit margins so much, CoinDesk’s Colin Harper reports. According to North American Bitcoin mining company Luxor’s hashprice index, miners are extracting $0.096 for every terahash they produce, down from the roughly $1.40 miners could expect to make three years ago.  ConsenSys CBDCs ConsenSys will work with Societe Generale - Forge, the bank's digital assets arm, in a central bank digital currency (CBDC) pilot. The Ethereum incubator will explore the limits of CBDC issuance and management, delivery versus payment and cross-chain interoperability, CoinDesk's Daniel Palmer reports. Societe Generale - Forge has previously issued bonds worth millions of euros over a blockchain, with one of the initiatives being in collaboration with France's central bank. ConsenSys was chosen in September to work with the Hong Kong Monetary Authority on a different CBDC pilot. GBTC whales BlockFi has taken a 5% share of Grayscale’s $4.8 billion bitcoin trust. According to Tuesday Securities and Exchange Commission (SEC) filings, reviewed by CoinDesk’s Danny Nelson, the crypto lender now holds 24,235,578 GBTC shares. CEO Zac Prince said in a press statement BlockFi’s “significant” GBTC position will “add value” to the “marketplace for liquid and illiquid” shares. Crypto fund manager Three Arrows Capital is the only other entity with comparable GBTC holdings, having amassed over 21 million shares – some 6.26% of GBTC at the time – by June. (Grayscale and CoinDesk are both wholly owned by Digital Currency Group.) Banking blockchain JPMorgan is inviting 400-plus financial institutions (including 25 of the largest 50 banks) to start building on top its revamped blockchain network, Liink . Designed to connect banks in a peer-to-peer fashion and help them remove the pain points from cross-border payments, the closed source Liink is more of a “decentralized network” and less like a “central command product,” Christine Moy, head of Liink, told CoinDesk’s Ian Allison. “Think of it as the foundation of an enterprise mainnet.” The interbank transfer system is aimed as a complement of – but could be a killer to – SWIFT.  Power hire The one-time New York State finance regulator who shepherded the state’s BitLicense through its early days will join tech ventures fund Andreessen Horowitz (a16z) to focus on cryptocurrency companies. An a16z blog post said the fund's new chief regulatory officer, Anthony Albanese, will focus on crypto portfolio companies in "gaming, digital storage, payment systems, social media, creative marketplaces and more." “We’re seeing so much happening in the frontier areas like DeFi and stablecoins but also among the legacy financial services institutions from PayPal to JPMorgan," said Katie Haun, an a16z general partner. "He’s really the perfect addition at the perfect time." SPONSORED BY FLIPSIDE CRYPTO Bitcoin is now part of the Flipside Data Cooperative - a transparency initiative that provides public and shareable views of networks’ on-chain activity in real time. Flipside Crypto transformed Bitcoin’s blockchain data by labeling every stakeholder and transaction that has ever taken place on the network. The labeled data now powers public interactive dashboards, so anyone can watch where whales and other users are sending their BTC. Learn more about Flipside Crypto. Quick bites MicroStrategy is looking to add to its $521 million stash of bitcoin, the company’s president said Tuesday. The company has already seen a 22% return on its initial BTC buy. (CoinDesk) Australia’s largest stock exchange operator, ASX Ltd., has delayed the rollout of its blockchain-based trading platform until April 2023. Surging pandemic-led trading volumes would strain the in-development platform, it said. (CoinDesk) U.S. President Donald Trump’s campaign website was briefly compromised on Tuesday, as hackers looked to fleece cryptocurrency from unsuspecting supporters in the final days before the 2020 election. (CoinDesk) Malta, once a hub for crypto company registrations, has approved its first regulated crypto public offering: VAIOT, a blockchain and AI-powered services business. Decrypt asks whether Malta’s Initial Virtual Financial Assets Offering (IVFAO) is the new ICO. Messari explores how “DeFi Citadels” create and capture value. “The core of this business model is a protocol’s balance sheet, which can be defined as [total value locked]...” (paywalled) Most Influential 2020: Cast Your Vote Every year, CoinDesk recognizes the “Most Influential” people working to expand cryptocurrency and blockchain’s reach. It’s a list of the 10 outsized individuals who have gone the furthest and done the most. In this most unusual year, we need your help determining who should be named as Most Influential. Check out the list of the top contenders and cast your vote by Oct. 31. At stake Personhood proof Yesterday, Paula Berman, a co-founder of Democracy Earth, and Divya Siddarth, a researcher at Microsoft’s Office of the CTO, published an essay in CoinDesk detailing an answer to a long-standing question in internet development: How do you know you're not talking to a dog on the internet?  Explaining the concept of “proof-of-personhood,” the authors aim to outline a new model of consensus that authenticate digital identities, using actual human traits.  Currently, authentication systems rely on algorithms or third party credentials – often provided by centralized firms like Facebook or Twitter – to provide a layer of trust. As we’ve seen by the rise of disinformation and scams, it’s shaky at best. Further, because the current systems of identity rely on the disclosure of personal and private information to an identifier, it opens our lives to a degree of surveillance never before possible.  “Identity is one of our most fundamental human rights. Yet, in the age of surveillance, commodification and centralization it is under threat,” they write. Their solution, proof-of-personhood, explained for the first time as part of CoinDesk’s Internet 2030 series, outlines ways to form identities around subjective, rather than objective, metrics. “Instead of being generated and solved by computation, they are created and unlocked exclusively by the distinctive cognitive abilities of human brains,” they write. In turn, rather than having the web as a field of exploitation, by matching real-world identities to digital ones, in ways that preserves privacy and human dignity, will “foster prosocial, community-oriented behavior, where both users and applications are significantly limited in their ability to exploit and attack each other.” The authors also go into the areas where blockchains and other decentralized tools, as well as AI, have already failed to meet this need. If you’re interested in the idea of digital utopias, I suggest you read the entire article.  Crypto state With the U.S. Election Day next week, much is at stake - including crypto policy over the next four years.   Like it or not, this election will matter for the crypto industry. Our latest limited-run newsletter, The State of Crypto: Election 2020 by regulatory reporter Nikhilesh De, aims to walk you through why. At stake: Will new crypto products be approved or allowed to operate in the U.S.? Will regulators target more overseas exchanges and platforms like BitMEX? Will the U.S. launch a “digital dollar” or some other form of central bank digital currency? These questions will come down to who takes the reins at the various financial regulators and government departments. Over the next several days, we map out the possible outcomes and introduce analysis of the candidates.  Our limited-run newsletter runs Mondays, Wednesdays and Fridays at least until Election Day. Subscribe to The State of Crypto: Election 2020. Market intel Overbought bitcoin? A key indicator shows bitcoin’s recent rally is not overstretched. The "market value to realized value" (MVRV) Z-score – a measure used to assess undervalued and overvalued conditions – is showing bitcoin at lower levels than one would expect, if this were a market top, CoinDesk’s Omkar Godbole reports. Hovering at two-year highs at 2.12, bitcoin is still well below the 7.0 score at which an asset is considered overbought. “Put simply, the cryptocurrency is slightly overvalued but still has plenty of room to extend the run of gains from the low of $3,867 seen since mid-March,” Godbole writes. Who won #CryptoTwitter? ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. Blockchain Bites A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.

ETC Weekly - Network security, Thanos hard-fork, ECIP comparison This is the first edition of the relaunched ETC Weekly newsletter brought to you by the ETC Cooperative. We're pleased to provide you with the latest ETC news, updates, and related technologies. Protocol Majority of ETC mining pools have ECIP-1100 (MESS) enabled. Therefore, a 51% attacker's incentive is dramatically reduced because they would have to produce a chain segment with greater total difficulty than the canonical chain. Thanos hard-fork: ECIP-1099 is accepted which will halve the size and growth rate of the dag. ECIP-1099 will require a hard-fork, code-named, Thanos. Both Hyperledger Besu and Core-geth support ECIP-1099 and upon successful testing, the Thanos hard-fork would occur at block 11,700,000. Currently supported clients: Hyperledger Besu 20.10.0-RC2 or later. Core-geth 1.11.16 or later. The dag modification will change the algorithm to be, Etchash instead of Ethash. Etchash resources: https://github.com/eth-classic/etchash ETC Coop and IOHK collaborate to produce an ECIP Comparison for 51% Attack Resistance for the broader community's knowledge and understanding to resist 51% attacks. News Mantis is the first original ETC protocol providing node client by IOHK and it's coming back! The Mantis team publishes weekly development updates on IOHK's YouTube. Ethereum Classic - Mantis: IOHK Weekly Development Update #4 22 October 2020 Ethereum Classic - Mantis: IOHK Weekly Development Update #3 15 October 2020 Ethereum Classic's MESS Solution Won't Provide 'Robust' Security Against 51% Attacks: Report Ethereum Classic Labs Announces Chasing the GHOST: Network Security Hackathon, Nov 2, 2020 — Jan 11, 2021 How to Mine Ethereum and Ethereum Classic on 4GB GPUs Ethereum Classic CONFIRMATION Times Are Low Again ETC Cooperative 250 Park Ave S, New York NY 10003 United States You received this email because you signed up on our website or made a purchase from us. Unsubscribe