Mongolia Partners With Stablecoin to Use Blockchain for Lending Services, Money Transfers

Mongolia’s capital city of Ulaanbaatar has partnered with a stablecoin company to release instant money transfer and lending services, Asia’s largest tech media platform e27 reported on Jan. 11.

Ulaanbaatar City’s administration has agreed to partner with a South Korean blockchain company, dubbed Terra, in order to eventually replace the current payment methods for utility bill and government subsidies with the Terra stablecoin, according to the publication.

The pilot program is scheduled to be launched within the next six months, and will start in the city of Ulaanbaatar’s Nalaikh District, with plans to expand throughout the whole city. The article also states that the program within the Mongolian capital will contain both peer-to-peer payments and mobile payments.

Terra is a stablecoin project co-founded by Daniel Shin, the creator of South Korean e-commerce marketplace Ticket Monster. The stablecoin project closed a $32 million funding round in August 2018, with participation from Binance Labs, OKEx and Huobi Capital, as well as Polychain Capital.

Back last fall, the Bank of Mongolia, the country’s central bank, had given permission to Mongolia’s largest mobile telecoms operator to issue its own digital currency, as Cointelegraph reported on Sep. 28.

Terra, the stablecoin project, had already partnered with South Korean messaging app giant KakaoTalk back in last November as well. The partnership is aimed at developing a blockchain-based payment system and creating a blockchain ecosystem that would allow a large number of people to use its services, Cointelegraph wrote on Nov. 14.

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From Blanket Ban to Its Own Stablecoin: How Facebook’s Relationship With Crypto Changed Over 2018

On Dec. 20, Bloomberg reported that Facebook is making a stablecoin for WhatsApp users. The cryptocurrency will reportedly be used for money transfers made within the messaging app and will focus on the Indian market.

The move provides a curious juxtaposition for the social media giant, which banned cryptocurrency-related advertising across its network back in January and then partly reversed it in June.

Here’s how Facebook’s relationship with cryptocurrencies and blockchain has been developing in 2018 — overall, it has been a patchy road.

January: Zuckerberg is being bullish about crypto; Facebook bans crypto ads

On Jan. 4, Mark Zuckerberg set out his person challenge for 2018: to fix Facebook. While this year brought even more problems for the social media giant — Zuckerberg’s sweaty testimony on data privacy before the United States Congress being a primary example — the Facebook CEO seemed optimistic about the company’s future at the start of 2018. Interestingly, he cited encryption and cryptocurrencies as potential ways to empower users in his Facebook post:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands. […] I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Despite Zuckerberg’s bullish statement, on Jan. 30, Facebook announced that it will prohibit ads that use “misleading or deceptive promotional practices,” referring specifically to initial coin offerings (ICOs) and cryptocurrencies. Rob Leathern, product management director at Facebook, explained the company’s decision in a blog post:

“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”

The ban was “intentionally broad,” meaning that the social media company decided to ban all cryptocurrency ads on its platforms (namely Facebook, Instagram and Audience networks) first, and then find out how to pick out ones that are actually “deceptive.” However, Leathern also stated that the company intends to “revisit this policy and how [they] enforce it as [their] signals improve.”

Facebook’s move seemed to coincide with the U.S. Securities and Exchange Commission’s (SEC) public announcement regarding crypto-related investments and ICOs, which was published earlier in December 2017. In that statement, SEC Chairman Jay Clayton suggested that there is a growing trend for “fraud and manipulation” in the cryptocurrency and ICO markets due to their rising popularity.

Importantly, by rolling out its crypto ad ban, Facebook had set a precedent for other big tech companies, as Google and Twitter eventually followed suit. There was a shorter-term effect, too: The Facebook blanket ban was followed by a large Bitcoin (BTC) price drop, as it went from $11,200 to $8,800 over the few days after the decision was announced.

February: Facebook has no plans for crypto, says its head of Messaging

On Feb. 2, CNBC published an interview with David Marcus, Facebook’s head of Messenger and Coinbase board member, who has also admitted to having “a longtime” interest in cryptocurrencies.

Marcus told the news outlet that crypto won’t appear on his platform anytime soon, citing cost and scalability issues:

“Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we’ll do something,”

During the interview, Marcus also defended Facebook’s decision to ban all crypto-related ads:

“We want to protect the community. That’s job number one. All the legitimate people in the crypto world that I spoke to at least thanked me for what we just did with that move. […] The reality is the vast majority of these ads were a scam and we cannot allow scams to exist on our platform.”

However, he noted that the policy might be reviewed “once the industry self regulates a lot better and you have better more legit products that want to be advertised on the platform.”

May: Facebook forms its Blockchain team; rumors about social media’s own crypto emerge

On May 8, Facebook unveiled its blockchain plans, as David Marcus announced that he will head up the technology-focused group assembled within the social networking service company.

“I’m setting up a small group to explore how to best leverage blockchain across Facebook, starting from scratch,” Marcus stated on his personal page.

A few days later, on May 11, news outlet Cheddar reported that the social media outlet is “very serious” about launching its own cryptocurrency. Cheddar’s anonymous sources “familiar with Facebook’s plans” reportedly said that Facebook is “specifically interested in creating its own digital token” for its 2 billion users.

The company did not respond to rumors about the cryptocurrency, limiting their statement to a brief comment on the newly established blockchain team:

“Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”

June: Facebook backpedals on the crypto ad ban

On June 26, Facebook made somewhat of a U-turn in regard to its views on crypto. The social media giant updated its policies to once again allow cryptocurrency ads on the platform — however, it has kept its ban on ICOs.

In the accompanying announcement, Facebook said it has been looking into the best way of “refining” its blanket ban on crypto-related ads “over the last few months,” in order to “allow some ads while also working to ensure that they’re safe.”  

Facebook’s revised “prohibited products and services policy” stated:

“Starting June 26, we’ll […] allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings.”

However, the updated policy required advertisers to submit an application so that Facebook can evaluate their qualification to run crypto-related ads. Specifically, applicants were advised to include “any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business.” Ultimately, Facebook stated that “not everyone who wants to advertise will be able to do so.”

July: Facebook’s director of engineering moves to its blockchain team

On July 6, Evan Cheng, Facebook’s director of engineering of three years, moved to the same position at the company’s recently established blockchain team led by David Marcus.

The software engineer updated his LinkedIn profile to reflect the newly acquired position, and the change has also been confirmed by Facebook.

Prior to this, Cheng was heading up the programming languages and runtimes division at Facebook for about three years. Before joining the social media company, Cheng was working on back-end engineering for the tech giant Apple for almost 10 years.

August: Marcus leaves Coinbase to avoid conflict of interest; Facebook denies working with Stellar

On Aug. 10, Marcus announced he was quitting his position on the board of Coinbase, which he obtained in December 2017:

“Because of the new group I’m setting up at Facebook around Blockchain, I’ve decided it was appropriate for me to resign from the Coinbase board. […] I’ve been thoroughly impressed by the talent and execution the team has demonstrated during my tenure, and I wish the team all the success it deserves going forward.”

According to a Facebook spokesperson cited by CNBC, the move was “to avoid the appearance of conflict, rather than because of an actual conflict.”

Also on Aug. 10, Business Insider reported that Facebook and Stellar, a decentralized protocol for cross-border digital currency to fiat currency transfers, had been considering a potential partnership to build a Facebook variant of the Stellar blockchain. The move “could shed light on Facebook’s ambitions to push into finance and take on big banks,” the report suggested.

However, Facebook promptly denied entering into talks with cryptocurrency firm Stellar. The social media giant’s spokesman reportedly told Cheddar that Facebook was “not engaged in any discussions with Stellar, and [was] not considering building on their technology” on the same day.

December: Facebook’s blockchain arm is on a hiring spree; rumors about a WhatsApp stablecoin surface

In December, the Facebook blockchain arm’s hiring spree was noticed by Cointelegraph, as the social media company listed at least five new blockchain-related positions on its careers page over three weeks, most of which have been closed as of press time.

The only remaining position mentioning blockchain is for a business development lead, for which potential applicants are required to have a “deep understanding of blockchain product and technology” in order to “inform and influence [Facebook’s] product roadmap and support and execute on product plans.”

As per Cheddar, by Dec. 13, Facebook’s blockchain department, once categorized by its head David Marcus as “small,” had nearly 40 employees. Facebook job listings state that its blockchain group’s “ultimate goal is to help billions of people with access to things they don’t have now,” which “could be things like equitable financial services, new ways to save, or new ways to share information.”

Further, in December, rumors about the Facebook-run cryptocurrency reignited once again. First, Cheddar cited a source who said that “Facebook employees pitched the idea of creating a decentralized digital currency” at a private dinner the company hosted during an unspecified crypto conference.

Further, on Dec. 21, Bloomberg followed with a more detailed report, stating that the social media company is making a cryptocurrency for users of the messaging service WhatsApp, which Facebook obtained for $19 billion back in 2014.

The token will allegedly allow users to make money transfers within the messaging app and will focus on the remittances market in India, where WhatsApp is reported to have more than 200 million users. According to data from the World Bank, the country received nearly $69 billion in foreign remittances in 2017, which is 2.8 percent of India’s GDP.

More specifically, Bloomberg’s sources said that Facebook is developing a stablecoin. However, it is not likely to be released anytime soon, as the social media company is reportedly still figuring out which asset their stablecoin will be tied to.

As for public comments, Facebook has been forwarding the same statement since May, when first rumors regarding their own crypto emerged. It reads: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”

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Hodler’s Digest, Nov. 12–18: a Stablecoin Gets Sharia Certified, the IMF Considers Central Bank Digital Currencies

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Swiss Crypto Firm X8 AG Receives Islamic Finance Certification for Sharia-Compliant Stablecoin

Swiss-based fintech firm X8 AG has received a certification from the Shariyah Review Bureau (SRB) for its Ethereum-based stablecoin. According to the X8 director and co-founder, the ETH-based crypto asset is backed by a basket of eight fiat currencies and gold, allowing Islamic advisors’ concerns over excessive volatility and speculation to be assuaged. The debate whether crypto can be Sharia-compliant has focused on their compatibility with the Islamic prohibition on sheer monetary speculation.

IMF’s Christine Lagarde: Central Bank Digital Currencies Could Have Legitimate “Role”

The head of the International Monetary Fund (IMF), Christine Lagarde, said this week that the international community should look into endorsing central bank issued digital currencies (CBDCs). Lagarde, despite being “not entirely convinced” of the concept of crypto more generally, stated the case for countries to issue government-backed tokens or similar assets in a speech. The comments came a day after the IMF published a dedicated report on CBDCs, examining what it views as the pros and cons of the financial tool.

Aftermath of Bitcoin Cash Fork Cause Expensive “Hash War” Between Camps

This week’s Bitcoin Cash (BCH) hard fork has led to a so-called “hash war,” resulting in mining at a hefty loss on both sides. BitMEX Research tweeted that “although the ABC SV split is entertaining, we estimate that SV miners are burning $280,000 per day mining the SV chain.” On the other side, BCH ABC miners are estimated to be making even larger losses than the SV camp. BitMEX Research estimated these numbers based on SV miners using Bitmain’s Antminer S9 machines, their ability to sell SV coins at the current spot market price ($100 at the time of the tweet), and energy consumption costs of 5 cents per/kWh.

Blockchain Protocol EOS’ Decentralization Questioned After Transactions Reversed

Blockchain protocol EOS had questions raised about its decentralization again this week as evidence emerged on Reddit that appeared to show a moderator reversing transactions which had already been confirmed. According to screenshots posted on the site, a dispute over a phished EOS account was referred to an EOS “arbitrator,” who then reversed the transactions without the owner’s permission, citing the EOS constitution for the actions.

US Man Fined $1.1 Million Over Fraudulent Bitcoin, Litecoin Schemes

U.S. citizen Joseph Kim of Phoenix, Arizona has been sentenced to 15 months in jail and fined $1.1 million for the misappropriation of Bitcoin (BTC) and Litecoin (LTC) from several people. The U.S. Commodity Futures Trading Commission (CFTC) has found that Kim defrauded his employer of about $601,000 worth of BTC and LTC into his own accounts in 2017. After Kim was subsequently fired, he reportedly then defrauded private investors to return the funds to his employer, luring around $545,000 worth of crypto from five individuals before losing the funds in a high risk bet.

Most Memorable Quotations

“Any time there are hard forks things tend to trade weird and strange, so I think people are trying to take some risk off the table,”— Meltem Demirors, CSO of CoinShares   

“Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about U.K. banks’ bailout. In more ways than one, Bitcoin is the evil spawn of the financial crisis,”  — Benoit Coeure, executive board member of the European Central Bank (ECB)

Laws and Taxes

Judge Rules in Favor of Canadian Bank in Case With Crypto Exchange 5k

A judge has ruled in favor of the Canadian Imperial Bank of Commerce (CIBC) in the court case involving a $19.6 million disputed sum between the bank and Canada’s largest crypto exchange QuadrigaCX. On Oct. 8, the exchange reported it had difficulties accessing its funds since january, when CIBC froze five accounts belonging to the exchange’s payment processor, Costodian Inc., and its owner, Jose Reyes over its purported inability to identify the funds’ owners. This recent court decision hands the disputed sum into the custody of the Ontario Superior Court so the court can identify the owner of the money.

Ripple Lawyers Suggest Moving Ongoing Securities Lawsuit to Federal Court

Lawyers representing payment startup Ripple in its current securities lawsuit are attempting to move the case to a U.S. federal court, a move that one legal commentator described as “tactical brilliance.” The court records confirm the application to move the case, which would potentially allow the outcome to prove that its XRP token is not a security under U.S. law. In the filing, litigation partner Peter Morrison noted that the case meets the requirements needed for the move to take place.

Malaysian MP Asks Gov’t to Develop Crypto Regulations Before Approving Political Funding Coin

A Malaysian Member of Parliament (MP) has asked the country’s government to develop comprehensive cryptocurrency regulations before going further with the Harapan Coin (HRP) crypto project. The project claims to be the world’s first political fundraising platform, with the aim of raising money for the opposition party in Malaysia and potentially becoming an official currency. The MP said this week that it was important to have appropriate crypto regulations before they are used to finance political campaigns and initiatives.

Ohio Congressman Plans Draft Bill to Let ICOs “Sidestep” Securities Laws

Ohio Congressman Warren Davidson made clear plans this week to introduce a bill that would allow Initial Coin Offerings (ICOs) to “sidestep” U.S. securities laws. The Republican congressman for the 8th district of the state of Ohio wants to propose a bill that would categorize ICOs as products, rather than securities, at both the federal and state level. The referred-to bill would reportedly “eliminate” the U.S. Securities and Exchange Commission’s (SEC) oversight of the industry.

Adoption

Major Swiss SIX Stock Exchange Lists World’s First Multi-Crypto ETP

Switzerland’s main stock exchange, the SIX Swiss Exchange, announced this weekend that it would list the world’s first multi-crypto-based exchange-traded product (ETP) next week. The ETP will be backed by Swiss startup Amun AG, will be listed under index HODL, and will track the five major cryptos: BTC, XRP, ETH, BCH, and LTC. The Amun AG index will be managed by the German index unit of investment management firm VanEck. Each crypto will have a certain market share within the upcoming ETP, with Bitcoin accounting for around half of the ETP’s assets.

Microsoft Introduces Cloud-Based Azure Blockchain Development Kit

U.S. software corporation Microsoft has announced the release of a serverless blockchain-powered Azure development kit, dubbed the “Azure Blockchain Development Kit.” The kit reportedly improves the capabilities of Microsoft Azure’s Blockchain Workbench, with features like off-chain identity and data, monitoring, and messaging application programming interfaces (API) in a format that can be used to develop blockchain-based apps. The announcement also notes that the release will focus on core objectives like “connecting interfaces, integrating data and systems, and deploying smart contracts and blockchain networks.”

Bank of America Receives Patent for Storing Clients’ Crypto in Enterprise Accounts

Major U.S. bank, Bank of America, has won a patent for a system that allow enterprises to store customers’ crypto deposits. The filing outlines several different interactions between clients’ crypto holdings and an enterprise account, with one setup allowing the enterprise account to conduct transactions on the customers’ behalf, debiting and crediting the account as appropriate. The document also touches on fiat-crypto conversions, outlining a system for determining optimal exchange rates for an “essentially simultaneous” conversion.

Chinese Insurance Giant Ping An, Sanya City Gov’t Build “Smart City” With Blockchain

One of the world’s largest insurance corporations, China’s Ping An Insurance Group, has signed an agreement with the Sanya municipal government to build a “Smart City” backed by blockchain, artificial intelligence (AI), big data, and cloud computing. The cooperation on financial investment and “Smart City” construction will play a role in the major strategic urban development in China.

Mergers, Acquisitions, and Partnerships

South Korean Messaging App Kakao, Stablecoin Tether Partner for Blockchain Payment System

Major South Korean Internet conglomerate and service provider Kakao Corp (which own messaging app KakaoTalk) and new stablecoin Tether have partnered to develop the latter’s blockchain-based payment system. The new agreement will apply the former’s blockchain platform tech Klatyn, of Kakao subsidiary Ground X, to a blockchain-based payment system. The cooperation plans to work on enhancing “core requirements for payment services, such as speed, stability and reliability.”

ETH-Payment Platform OmiseGo, Singapore Ride Hailing App Partner for Blockchain Tech

Ethereum-based payment platform OmiseGo and blockchain protocol Mass Vehicle Ledger (MVL) have announced that they will work together to research blockchain technology. The two companies will develop a Proof-of-Concept (PoC) to test whether the decentralized OMG Network could work for MVL’s data record-keeping system, recording data collected from TADA on the OmiseGo platform. OmiseGo and MVL will also collaborate on further technical and research cooperation on possible blockchain applications in TADA’s services.

Electronics Firm Bosch Partners With IOTA for New IoT Data Device

Engineering and electronics manufacturing giant Bosch has partnered with IOTA, with plans to integrate its new data collection Internet of Things (IoT) device with the decentralized IOTA Data Marketplace. The new connectivity device, Bosch XDK (Cross Domain Development Kit), is “a programmable sensor device and Internet of Things prototyping platform” that also works as a sensor node solution. The device will combine sensor, data storage, and network technologies to allow users of all programming level to collect real-time data and sell it on the IOTA marketplace.

Major Spanish Telecoms Operator and IBM Partner to Manage International Call With Blockchain

Spanish telecommunications firm Telefónica has partnered with IBM in order to apply blockchain tech to managing international mobile phone call traffic. Telefónica, the seventh largest telecom company in the world by market cap, is valued at $51 billion according to Forbes. The partnership is aimed at streamlining certain Telefónica business processes, including the reliability and transparency of information registered from various network when routing international calls. The telecoms company will use the IBM Blockchain Platform to track each international call and data such as origin, destination, and duration.

German Holding Company Bitcoin Group SE Acquires 100% of Investment Bank Tremmel

Bitcoin Group SE, a German holding company, has acquired a 100 percent stake in investment bank Tremmel Wertpapierhandelsbank GmbH. Bitcoin SE operates what is reportedly the county’s only regulated crypto exchange, Bitcoin Deutschland AG (Bitcoin.de). With the acquisition, the crypto holding will now obtain the use of Tremmel’s banking license, allowing the company to “significantly expand” its crypto-related offerings and operate ATMs for cryptocurrencies in Germany.

Funding Rounds

Hong Kong Crypto Exchange KuCoin Raises $20 Million in Funding Round

Hong Kong-based international crypto exchange KuCoin closed a Series A funding round this week worth $20 million. The round was led by IDG Capital, Matrix Partners, and Neo Global Capital, and the exchange noted that the funds will go towards the release of KuCoin’s 2.0 platform as well as expansion into new markets.

Winners and Losers

The crypto markets have taken a hit this week, with total market cap around $185 billion, Bitcoin trading around $5,599, Ripple at $0.52, and Ethereum at $176 by press time.

The top three altcoin gainers of the week are ZeusCrowdfunding, GoHelpFund, and Coupecoin. The top three altcoin losers of the week are Etheera, Vivid Coin, and Olive.

Top three altcoin losers of the week:

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD of the Week

“Crypto Hangover”: Nvidia’s Q3 Results Show Lack of Demand for GPU Crypto Units

American GPU manufacturer Nvidia released its third quarter earnings this week, showing a lack of demand for Nvidia’s GPU’s among crypto miners. The crypto frenzy late last year brought the prices for Nvidia gaming cards up, but with the bear market, the prices have not decreased quickly enough to attract customers waiting for more affordable cards, according to the Nvidia founder and CEO Jensen Huang. Huan told Reuters that the “crypto hangover lasted longer than we expected.”

Analysis: Bear Market, Declining Hashrates Makes Mining ETH Not Profitable

A report from U.S.-based global trading and tech firm Susquehanna has found that mining Ethereum (ETH) using a graphics processing unit (GPU) is no longer profitable. The analysis shows that profit per month for ETH miners using GPU rigs is now $0 as of Nov. 1, as opposed to the $150 per month in July 2017. Susquehanna notes reasons for the decline in profit include Ethereum’s falling price, but adds that in July 2017, miners profit was $147 even as ETH traded roughly around its current price.

Official Google G Suite Twitter Account Reportedly Compromised to Promote BTC Scam

The official Twitter account of Google’s G Suite appeared to tweet a Bitcoin (BTC) giveaway scam this week to its more than 800,000 followers. The tweet in question asked its followers to participate in a fraudulent 10,000 BTC giveaway, also announcing that Google’s G Suite now accepted crypto as a means of payment. Tech news outlet The Next Web later reported that the account was compromised through a third party marketing app that was authorized to post content on G Suite’s behalf. The scam also targeted major U.S. department retailer Target.

WSJ Report: SEC Opened Probe Into Erik Voorhees, Crypto Loans Firm Salt Over Token Sale

The Wall Street Journal reported this week that the U.S. Securities and Exchange Commission (SEC) had opened a probe in February against crypto loans company Salt Lending Holdings, which was once associated with crypto industry stalwart Erik Voorhees. The probe involves whether Salt’s 2017 $50 million token sale constituted a noncompliant securities offering and Voorhees’ potential involvement, which could break laws as he has effectively been prohibited from raising money in private markets after a SEC settlement in 2014.

US SEC Imposes “First” Civil Penalties Against Two ICOs for “Unregistered” Securities

The U.S. Securities and Exchange Commission (SEC) has levied civil penalties on two Initial Coin Offerings (ICOs) this week over their failure to register their token sales. CarrierEQ Inc. (Airfox) and Paragon Coin Inc. both reached settlements with the SEC, agreeing to “return funds to harmed investors, register the[ir] tokens as securities, file periodic reports with the Commission, and pay penalties” of $250,000 each. Both of the firms conducted token sales last year following the SEC’s warning that ICOs could be considered as securities offerings.

Prediction of Tthe Week

Bloomberg Analysts Predict BTC Price Fall As Low As $1,500

Bloomberg Intelligence analysts have predicted this week that Bitcoin “has further to fall,” noting that the coin is “no longer boring.” Hedge fund founder Travis Kling told Bloomberg that he “didn’t sleep well” in response to the recent Bitcoin Cash hard fork, adding that it could affect the entire crypto market.

Best Cointelegraph Features

Why Did Crypto Market Experience a $27 Billion Wipeout? Experts Discuss Factors

After the market saw several cryptocurrencies hitting new year-to-date lows, Cointelegraph looks at some of the reasons behind the $27 billion “wipeout.”

Opposing Bitcoin ABC and Bitcoin SV Factions’ Debates Grow Heated as the Bitcoin Cash Hard Fork Draws Closer

This week saw a volatile market amidst the Nov. 15 Bitcoin Cash hard fork, which divided the community into two “warring” factions: Roger Ver’s Bitcoin ABC and Craig Wright’s Bitcoin SV (Satoshi’s Vision).

Skirting the Great Wall, Part Three: The Paradox of Cryptocurrencies in China

In the third part of Cointelegraph’s series on Chinese cryptocurrency regulations (read part one – here, and part two – here), the article looks at the People Bank of China (PBoC)’s crypto regulatory interventions, as well as the role of China’s judiciary in cases involving crypto.

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China Should Consider Launching its Own Stablecoin, Central Bank Expert Says in Op-Ed

The Chinese government should consider launching its own yuan-backed stablecoin despite the current ban on cryptocurrencies, an op-ed in Chinese financial journal CN Finance reports Tuesday, Oct. 9.

An expert from the People’s Bank of China (PBoC), Li Liangsong, and professor of Fudan University Wang Huaqing wrote an article called “Analysis of Digital Stable Coins” for CN Finance — a bimonthly journal affiliated with the PBoC.

In the opinion piece, the authors provide a brief review of USD-backed coins, such as Tether, the Gemini dollar, and Paxos Standard. The researchers expect them to increase the role of dollar on a global stage and to suppress other fiats, with the yuan among them.

The authors suggested that China should analyze other companies’ experience and “double its efforts” to create a local stablecoin. However, other digital currencies have to stay prohibited in China, they stated.

Stablecoins have recently seen a boom with two USD-backed coins launching in the U.S. in September.

The Winklevoss twins, founders of crypto trading platform Gemini, acquired permission from New York regulators to release their own stablecoin, the Gemini dollar. Later, Circle — through a consortium that includes Bitmain — announced it is launching a USD-backed digital token dubbed the “USD Coin.”

Shortly after, the audit giant PricewaterhouseCoopers (PwC) partnered with decentralized lending platform Cred to offer their expertise in launching its USD-backed coin, especially in terms of transparency and “substantiation,”

The Chinese government first started its anti-crypto campaign in 2017 by closing all of the country’s cryptocurrency exchanges and banning Initial Coin Offerings (ICO). Following the move, the PBoC has repeatedly warned citizens about the risks of crypto trading.

Despite the crypto ban, the country has actively been exploring blockchain solutions. Earlier this autumn, the PBoC announced that its blockchain trading and finance platform is launching in Shenzhen. The ecosystem is also being tested in Guangdong, Hong Kong, and the Macau Bay Area and is being developed for cross-border trading. Later, the country’s official blockchain pilot zone was established in the Hainan province within a dedicated tech park.

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Blockchain Startup Havven to Launch Stablecoin on EOS This Year

A blockchain startup that sets out to offer cross-blockchain payments has announced it is planning to bring its existing stablecoin – a cryptocurrency tied to a stable asset – to the EOS network.

Called Havven, the Australia-based project said in a release on Wednesday that it is expecting to issue its nUSD stablecoin on EOS by the end of this year. The U.S. dollar-pegged token first launched on the ethereum network in June.

The goal, the startup said, is not to switch the token’s fundamental network from ethereum to EOS, but to issue nUSD on both networks separately – a mission it claims will “offer cross-blockchain stablecoins.”

“At this stage, cryptocurrency is still in its infancy, so it’s not clear which blockchains will manage to scale,” Havven’s founder Kain Warwick said in the announcement, adding:

“For this reason, it’s important that projects providing blockchain infrastructure plan to provide cross-chain compatibility, so their success isn’t bound to the success of whatever chain they’ve chosen.”

A stablecoin is typically designed to adjust its supply as the market shifts in order to maintain a price pegged to an asset such as a fiat currency, providing a lack of volatility makes it easier for businesses or users to adopt.

For instance, stablecoin startup MakerDAO is currently working with supply chain management firm Tradeshift to use its ethereum-based DAI token to help speed up payments for small businesses.

Havven’s effort comes after EOS officially announced its long-awaited network launch in June. Block.One, the entity behind the EOS blockchain has also revealed a $1 billion investment fund to facilitate the growth of its ecosystem.

IBM is also working with a startup called Stronghold to launch a stablecoin on the stellar blockchain.

Boy balancing image via Shutterstock

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