Category Archives: Cryptocurrency

/latest/2019/10/facebook-s-cryptocurrency-libra-could-threaten-alipay-and-wechat-pay-tencent-says/

Facebook's Cryptocurrency Libra Could Threaten Alipay and WeChat Pay, Tencent Says

facebook-s-cryptocurrency-libra-could-threaten-alipay-and-wechat-pay-tencent-says

Chinese internet giant Tencent, the parent company of the WeChat messaging app, has said Facebooks cryptocurrency Libra could pose a threat to existing payment systems like Alipay and WeChat Pay.

In a blockchain whitepaper the company published in Chinese, first seen by CoinDesk, Tencent noted Facebooks cryptocurrency initiative was bold and radical, but added its also prudent and rational.

Tencent argues Libra could gain market share in countries that dont have a credible fiat currency of their own, and in areas where access to basic financial infrastructure is poor. It could also threaten competitors like Chinese digital payments firms, as they couldnt replicate the system.

Any internet company that has a relatively mature digital payment system, such as WeChat Pay and Alipay, would be threatened by the stablecoin if it is ever launched.

The Libra cryptocurrency may be being created through an initiative led by Facebook, but its governed by the Libra Association, a group of various firms thatll help managed the network. Its set to be backed by a basket of fiat currency and short-term U.S. Treasury bonds.

In its whitepaper Tencent added that the Libra could affect the course of global expansion for digital payment companies, especially for those who are not in the Libra consortium. Tencent itself has notably been staying away from cryptocurrencies in general, although Chinas central bank has been working on one for the last few years.

Tencents social media app WeChat is reported to have over 1 billion daily active users, and its digital payments feature WeChat Pay is one of the biggest firms in the industry. Alongside it is Alipay, a mobile payments affiliate of the Alibaba Group.

Both firms have made it clear they arent supporting cryptocurrencies or their use through their applications, like because of the Chinese governments ban on fiat-to-crypto trading. In a post on Weibo Tencent noted crypto trading isnt supported via WeChat Pay, while Alipay made it clear in a reply to Binance that it doesnt want its users to buy crypto through it.

Tencent has, however, been exploring blockchain technology by building a suite of blockchain services. The company has also warned of crypto vulnerabilities in the past.

Featured image via Unsplash.

Go here to see the original:
Facebook's Cryptocurrency Libra Could Threaten Alipay and WeChat Pay, Tencent Says - CryptoGlobe

Shutterstock

At the recent Blockchain LIVE 2019 hosted annually in London, I had the pleasure of giving a talk on Next Generation Infrastructure: Building a Future for Smart Cities. What exactly is a smart city?The term refers to an overall blueprint for city designs of the future.Already half the worlds population lives in a city, which is expected to grow to sixty-five percent in the next five years. Tackling that growth takes more than just simple urban planning. The goal of smart cities is to incorporate technology as an infrastructure to alleviate many of these complexities. Green energy, forms of transportation, water and pollution management, universal identification (ID), wireless Internet systems, and promotion of local commerce are examples of current of smart city initiatives.

The current technology needs of smart cities are served by what is called the Internet of Things, a term used to describe an overall network of devices with embedded unique identifiers. Example use cases for these devices include payment for items, and traffic management. In London, a traffic management system known as SCOOT optimises green light time at traffic intersections by feeding back magnetometer and inductive loop data to a supercomputer, which can coordinate traffic lights across the city to improve traffic throughout.

Barcelonasaved75 million of city funds and created 47,000 new jobs in the smart technology sector by implementing a network of fiber optics throughout the city, providing free high-speed Wi-Fi that supports the IoT and further linking to the integration of smart water, lighting and parking management. The Netherlands hastestedthe use of IoT-based infrastructure in Amsterdam, where traffic flow, energy usage and public safetyare monitored and adjusted based on real-time data. Meanwhile, in the United States, major cities like Boston and Baltimore have deployed smart trashcans that relay how full they are and determine the most efficient pick-up route for sanitation workers.

In 2015 India became one of the pioneers to openly enact a smart city mission across 12 of its cities. As governments across the world start to implement these initiatives, blockchain can provide the infrastructure necessary for transaction management. Transparency and security core fundamentals of blockchain are two very important elements in a smart city implementation.

Today, there are over a dozen smart cities, with less than a quarter that have an active large scale implementation of the use blockchain or distributed ledger technology. The city of Dubai has already planned to become the first blockchain powered smart city by 2021 and the country of Estonia has been using variations of blockchain and distributed ledger technology to keep track of citizens since 2012.

Leading smart city developers like Hancom are already supplying products and services from core hardwares of IOT to actual Smart City development. Gapyeong Malang Malang Smart Ecosystema 470 acre smart city development project is just one the many initiatives under the Hancom Group that will incorporate blockchain technology as the basis for smart city development. The most recent project for the Group, is the development of the Atlanta based Augury Square. The Augury Square is a 30-acre project that will incorporate blockchain and the use of cryptocurrency accelerating the concept of digital currency usage into daily life activities for its residents.

Example use cases that will improve resident life across cities when implemented with blockchain are without bounds. Information captured and kept in a cloud based infrastructure utilized by a smart city can be encoded through a blockchain system to ensure the privacy and security of data.The use of blockchain for identification in a smart city can assist with proof of citizenship, voting for public office, and tax data.In addition to security and fraud measures, the elimination of paperwork under such a system connects right with the smart city initiative to manage and reduce pollution and waste.

Other typical services include the use of internet sensors to detect road maintenance or other general repairs, connection of home utilities and rent to the blockchain and well as healthcare services. Blockchain healthcare networks which store protected health data information can be useful when considering emergency situations that involve individuals in a crisis, proving beneficial to certified first responders (MFS) in accessing pertinent medical information.

Whats most important to a smart city, however, is integration.None of the services mentioned above exist in a vacuum; they need to be put into a single system. Blockchain provides the technology to unite them into a single system that can track all aspects combined.

The Smart City Expo will take place in Barcelona, Spain, in November 2019.It aims to discuss the growing urbanization of the world with attributes of blockchain.

Original post:
Are Smart Cities The Pathway To Blockchain And Cryptocurrency Adoption? - Forbes

The U.S. has many regulators responsible for overseeing different aspects of crypto assets, each with its own stance on how they should be regulated. Major regulators in the U.S. with strong opinions on cryptocurrency include the SEC, the CFTC, the Federal Reserve, Fincen, and the IRS.

Also read: Tax Guide: What Crypto Owners Should Know

The Securities and Exchange Commission (SEC) has statutory authority over crypto assets that are deemed security, with its oversight extending to the offer, sale and trading in those assets. A number of companies have tried to obtain the agencys approval for bitcoin exchange-traded funds (ETFs), but all proposals have been rejected so far.

SEC Chairman Jay Clayton said in an interview last month that the commission is closer to approving a bitcoin ETF than it was before. However, he added that theres work left to be done, raising a number of questions he needed answered. How do we know that we can custody and have a hold of these crypto assets? Thats a key question, the chairman opined. And an even harder question, given that they trade on largely unregulated exchanges, is how can we be sure that those prices arent subject to significant manipulation. Clayton elaborated:

Progress is being made but people needed to answer those hard questions for us to be comfortable that this was the appropriate type of product.

The chairman and other SEC commissioners also appeared before the House Financial Services Committee last month for which they answered some crypto-related questions. Regarding Facebooks planned Libra coin, Clayton told the committee that he had not discussed the matter with the company, concerning whether Libra will be a security, emphasizing that he was not prepared to make a decision like that here. He further remarked:

Cryptoassets, while they have benefits can present a great deal of risk, particularly in cases where, in form, they are the same as securities or the same as currencies, or the same as payment systems, but theyre not regulated in the same way.

Meanwhile, SEC Commissioner Hester Peirce, aka Crypto Mom, said I would like to see us be a little more forward-thinking on the use of utility tokens, adding that I am hoping we can work to create some sort of safe harbor. The crypto-friendly commissioner has repeatedly spoken favorably on the subject. As technology changes, well see them becoming much more the money of the internet, the commissioner recently said.Peirce also believes the time is right for a bitcoin ETF. Meanwhile, the commission has green-lighted two token offerings under Regulation A+.

The Commodity Futures Trading Commission (CFTC) has broad authority over derivatives and commodities, and crypto-asset derivatives and commodities are regulated in the U.S. in the same manner as any other derivative or commodity.

At the Yahoo Finance All Markets Summit in New York City on Oct. 10, CFTC Chairman Heath Tarbert talked about CFTCs jurisdiction over crypto assets. He said:

Weve been very clear on bitcoin: bitcoin is a commodity under the Commodity Exchange Act. We havent said anything about ether until now. Its my conclusion as chairman of the CFTC that ether is a commodity and therefore would fall under our jurisdiction.

My guess is that you will see, in the near future, ether-related futures contracts and other derivatives potentially traded, the chairman continued, adding that forked assets should be treated as the original assets. Tarbert succeeded J. Christopher Giancarlo as the chairman of the CFTC in April.

Under Giancarlo, the CFTC oversaw a number of crypto derivatives and approved several companies such as Ledgerx and Erisx. Two major derivatives exchanges, CME and Cboe, both self-certified to list bitcoin futures products. Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, launched Bakkt last month. Giancarlo explained:

CFTC regulatory practice is for exchanges to self-certify that new contracts meet CFTC core principles before listing. This approach has allowed for robust and dynamic risk transfer markets to develop and test new products without a time-consuming application process.

The Federal Reserve System, the U.S. central bank, is responsible for conducting monetary policy, promoting financial system stability, supervising financial institutions, and fostering payment and settlement systems. With increasing regulatory concerns over Facebooks Libra digital currency project, Federal Reserve Chairman Jerome Powell was asked last month during a discussion with Swiss National Bank Chairman Thomas J. Jordan in Zurich, whether he believes that central banks are missing out on opportunities presented by digital currencies. He replied:

We are following very carefully the whole question of digital currencies Its not something that we are actively considering For us, it raises substantial, significant issues that we want to see carefully resolved.

The chairman proceeded to talk about cyber issues and the lack of demand for cryptocurrency, asserting that consumers have plenty of payment options. His statement echoes his testimony before the Senate Committee on Banking, Housing and Urban Affairs in July when he said We havent seen widespread adoption of cryptocurrency. He believes that no one uses bitcoin for payments, noting:

They use it more as an alternative to gold, really. Its a store of value. Its a speculative store of value like gold.

Nonetheless, he admitted the possibility that the need for a reserve currency in the traditional sense would be diminished or even removed should cryptocurrency become prevalent throughout the globe.

The Financial Crimes Enforcement Network (Fincen) is the lead regulator for the Bank Secrecy Act (BSA), the primary U.S. AML/CFT regulatory regime. Fincen announced back in March 2013 that AML laws apply to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies, subjecting them to money services business (MSB) registration, reporting, and recordkeeping regulations.

In May, the regulator published a 30-page document entitled Application of Fincens Regulations to Certain Business Models Involving Convertible Virtual Currencies, which clarifies registration requirements for MSBs. On Oct. 11, Fincen issued a joint statement with the SEC and the CFTC to remind anyone engaged in crypto activities of their AML and CFT obligations under the BSA.

The Internal Revenue Service (IRS) has been active in taxing crypto owners. The agency has sent several warning letters to remind them to pay taxes. In general, the IRS explained that The sale or other exchange of virtual currencies, or the use of virtual currencies to pay for goods or services, or holding virtual currencies as an investment, generally has tax consequences that could result in tax liability.

Last week, the agency issued new guidance for crypto taxation which supplements existing guidance published in 2014. The new guidelines answer many questions but also raise many more, especially regarding the tax treatment of coins received from hard forks and airdrops. Anyone receiving cryptocurrency from an airdrop following a hard fork will owe income tax provided you have dominion and control over the cryptocurrency so that you can transfer, sell, exchange, or otherwise dispose of the cryptocurrency, the new guidance details.

The agency also published a draft of the new 1040 tax form used by over 150 million U.S. taxpayers which has a question on cryptocurrency. At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? the first question on Schedule 1 of Form 1040 reads.

What do you think of U.S. regulators stance on crypto assets? Let us know in the comments section below.

Images courtesy of Shutterstock and the U.S. government.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

More here:
Where US Regulators Stand on Cryptocurrency - Bitcoin News

Bitcoin plays a vital role in the underground economy and is the principal payment method that is used in the dark web. Those seeking to mask their tracks are gradually learning to use privacy-focused alternatives. Europol, in its latest assessment of internet-based organized crime, stated:

While we have previously reported a small shift towards more privacy-focused cryptocurrencies such as Monero, Bitcoin remains the currency of choice for both legitimate and criminal use.

Europol reported that Bitcoin is predominant in the underground economy, notably in dark web markets due to its familiarity within the customer base. Precisely, Bitcoin is extensively used in ransomware campaigns. Europol states that these attacks are the most prominent cybercrime it tackles.

Hard Fork has previously accounted for many ransomware attacks that demanded Bitcoin to restore encrypted files. Authorities mention that there has been a rapid pronounced shift towards the use of more privacy-orientated cryptocurrencies and hopes that the trend is maintained as criminals become more security-aware. Europol said:

The main developments regarding this trend are on the Darknet [sic] markets, several of which also accept Monero, or in some cases exclusively trade in it.

Continued here:
Europol: Bitcoin is the principal cryptocurrency used in the dark web - FXStreet

The agency says Telegram didn't register the offering with its office, and since it sees Grams as securities, it's accusing the company of violating the Securities Act of 1933. It's not clear how this restraining order would affect Gram's launch as a whole. Former SEC attorney Zachary Fallon told Bloomberg that it could also complicate the company's ability to sell tokens in other countries. But even if it doesn't prevent Telegram from launching outside the US, it could still cause huge issues for the company. The New York Times reported back in August that Telegram promised investors it would deliver Grams by October 31st or return their money.

The SEC Division of Enforcement's Co-Director Stephanie Avakian said:

"Our emergency action today is intended to prevent Telegram from flooding the US markets with digital tokens that we allege were unlawfully sold. We allege that the defendants have failed to provide investors with information regarding Grams and Telegram's business operations, financial condition, risk factors, and management that the securities laws require."

The agency also stressed that companies can't avoid federal securities laws just by labeling their products a cryptocurrency or a digital token.

Read more:
SEC puts a stop to Telegram's cryptocurrency plans in the US - Engadget

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at http://www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

As with many websites, JD Supra's website (located at http://www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

We use cookies and other tracking technologies to:

There are different types of cookies and other technologies used our Website, notably:

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

See the article here:
Alert: IRS Releases Long-Awaited Guidance on Taxation of Cryptocurrency Transactions - JD Supra

While the Securities and Exchange Commission (SEC) is still keeping a cryptocurrency-based exchange-traded fund (ETF) from debuting on a major U.S. exchange, over 7,000 miles away, China is looking to launch its own global cryptocurrency.

The news comes amid social media giant Facebook facing numerous obstacles trying to launch its own cryptocurrency project, dubbed Lira, in the U.S.

According to a CNBC report, the second largest economy announced earlier this year that it was working on a digital currency backed by the yuan, reportedlyinspiredby Facebooks announcement. Analysts and crypto industry leaders are highlighting geopolitical implications of China launching a digital currency first especially if libra hits a brick wall with U.S. regulators.

China has been incredibly strategic about how they think about cryptocurrency, said Brad Garlinghouse, CEO of Ripple. They have been dependent on the U.S. dollar as the global reserve currency to the extent that other currencies emerge, and they can help propagate those, theyre intrigued by that.

China has been more receptive to cryptocurrency efforts compared to its trade war counterpart. If Facebook encounters further regulatory obstacles, China could assume the mantle in terms of global crypto dominance.

If U.S. regulators ultimately dismiss Libra and decide not to draft regulation to encourage Crypto innovation in the U.S., Chinas [Central Bank Digital Currency] may be strategically positioned to become the de facto global digital currency in emerging economies, largely through Alipay, WeChat, UnionPay and other messaging & payment apps, said RBC analysts Mark Mahaney and Zachary Schwartzman.

China is also expanding its technology sector as it looks to wean itself off of reliance from the U.S. Investors can look to China-focused ETFs for opportunities in their burgeoning tech sector.

For more market trends, visit ETF Trends.

Link:
Chinas Global Cryptocurrency May Be on the Horizon - ETF Trends

A visual representation of a cryptocurrency coin on display in front of the logos for Facebook and Libra.

Chesnot | Getty Images

Facebook's cryptocurrency plans looked shaky this week after a handful of high-profile members bowed out of the project. But while libra slowly gets off the ground, China is looking to launch an alternative.

The People's Bank of China announced earlier this year that it was working on a digital currency backed by the yuan, reportedly inspired by Facebook's announcement. Analysts and crypto industry leaders are highlighting geopolitical implications of China launching a digital currency first especially if libra hits a brick wall with U.S. regulators.

"China has been incredibly strategic about how they think about cryptocurrency," Brad Garlinghouse, CEO of Ripple, told CNBC in a phone interview. "They have been dependent on the U.S. dollar as the global reserve currency to the extent that other currencies emerge, and they can help propagate those, they're intrigued by that."

China's proposed digital currency would bear some similarities to Facebook's libra, a senior central bank officer said this summer, according to a transcript of a speech that was published online. He also said the digital coin could be used across major payment platforms, including China's ubiquitous WeChat and Alipay.

RBC Capital Markets analysts told clients this week that based on recent conversations and meetings in Beijing, China's plans are moving quickly. The People's Bank of China "has expedited its development of a Central Bank Digital Currency" after Libra's announcement in June, the analysts said.

"If U.S. regulators ultimately dismiss Libra and decide not to draft regulation to encourage Crypto innovation in the U.S., China's [Central Bank Digital Currency] may be strategically positioned to become the de facto global digital currency in emerging economies, largely through Alipay, WeChat, UnionPay and other messaging & payment apps," RBC analysts Mark Mahaney and Zachary Schwartzman said in a research note Tuesday.

Cryptocurrency would add to a long list of existing tensions between the global superpowers. The U.S. and China are locked in a stalemate on trade, and a battle for dominance in 5G, the mobile network promising faster data speeds. The U.S. Treasury Department has also labeled China as a currency manipulator a complaint that could be exacerbated if a yuan-backed cryptocurrency takes off.

Fed chairman Jerome Powell said earlier this year that the U.S. is keeping an eye on sovereign-issued digital currencies but that it wasn't something he was "actively considering." In the meantime, other digital currencies could "dampen the domineering influence of the U.S. dollar on global trade," Bank of England governor Mark Carneysaid during a speech in Jackson Hole, Wyoming, earlier this year.

In June, Facebook announced that it would spearhead the launch of a cryptocurrency run by the nonprofit Switzerland-based Libra Association in 2020. Libra is a so-called "stable coin," meaning its value is tied to that of an underlying fiat currency such as the dollar. For now, the Libra Association has said its cryptocurrency would be pegged to the yen, U.S. dollar and euro. It has not said whether the yuan would be included.

It started with roughly two dozen members. But last week Visa, PayPal, MasterCard and Stripe all dropped out, fueling concerns that the project may never see the light of day. The association met this week in Geneva, Switzerland, and the remaining group signed the association's charter on Monday.

Katie Haun, general partner at Andreessen Horowitz and co-head of its $350 million cryptocurrency fund, was elected to the board of directors for the project. Despite the exodus of high-profile names this week, Haun said she and the firm "remain committed to Libra's mission."

The project received pushback this summer from senior congressional finance committee members, global regulators, former lawmakers and industry insiders who flagged risks and questioned Facebook's ambitions.

Lisa Ellis, senior equity analyst at MoffettNathanson, said regulators may be sidetracked by Facebook's involvement in libra and need to "keep their eye on the fact that we do need to innovate to create digital forms of currency."

"If governments and regulators are concerned about their control over monetary systems and money flows, the best defense would be a good offense," Ellis said. "It would behoove regulators in the U.S. and Europe over the long term to maintain their leadership given that the dollar, the euro and the yen are used as proxies for global reserve currencies."

Ripple's Garlinghouse, who has been critical of libra, pointed to U.S. dominance in the rise of the internet, too. That was in part because of a "constructive regulatory policy." If cryptocurrency projects aren't grown in the U.S., he said, there are potential "geopolitical implications."

Garlinghouse is hardly alone in calls for clearer regulation. In a roundtable hosted on Capitol Hill last year, more than 50 cryptocurrency industry participants from Fidelity, Nasdaq, State Street and Andreessen Horowitz voiced concerns about lack of clear laws and potential for innovation to flee overseas as a result.

"While bashing Facebook is good politics, neglecting the traditional role of the United States in welcoming the growth of innovative technology is not," the Blockchain Association, a Washington, D.C., lobbying group for cryptocurrency and blockchain, said in a blog post last month. "Congress should focus on nurturing open blockchain networks before the United States loses out in this global technology race."

Andreessen's Haun told CNBC recently that it would be a "dangerous thing, and frankly a dangerous precedent to start shutting down technology before it's built." Haun also said there are "national security implications" if the United States falls behind in this area, and pointed to China's cryptocurrency as an example.

Others are more worried about the national security implications if libra does get off the ground. Treasury Secretary Steven Mnuchin said in July that Facebook's planned digital currency "could be misused by money launderers and terrorist financiers" and that it was a "national security issue."

He told CNBC's "Squawk Box" in an interview Monday that he met with libra representatives on multiple occasions and has been "very clear" that if they don't meet anti-money-laundering standards "that we would take enforcement actions against them."

"I think they realized that they're not ready, they're not up to par," Mnuchin said. "I assume some of the partners got concerned and dropped out until they meet those standards."

For Facebook, moving meaningfully into payments would likely be done through WhatsApp. The mobile chat app, bought by Facebook for $19 billion in 2014, doesn't have fully built-in payment functions yet. WhatsApp has, however, done a pilot program with payments in India.

RBC's Mahaney and Schwartzman said that messaging apps "represent the greatest opportunity to onboard consumers to digital wallets which could lead to a greater consumer adoption of digital currencies." This has already played out in China, where, according to RBC, WeChat has more than 1.1 billion monthly active users and Alipay counts 1.2 billion global annual active users.

Brian Kelly, CEO of BKCM, also said the reason Facebook is launching libra in the first place is to compete with those "super apps" in Asia. WeChat and Alipay's built-in payments capability could be a leg up in emerging markets.

Offering a payments capability is especially important in places such as sub-Saharan Africa, where mobile money is on the rise. According to the World Bank, the share of people with traditional financial accounts remained flat through 2018. But the percentage of those with mobile-only money accounts nearly doubled year over year to 21%.

The Libra Association is moving ahead this week despite the loss of key members. Facebook CEO Mark Zuckerberg is heading to Capitol Hill next week to answer for the project in front of the House of Representatives. Kelly said if regulatory pushback persists, he "wouldn't be surprised if libra launches in another country."

Even in the face of regulatory scrutiny, RBC analysts are predicting "Facebook will continue to pursue digital wallet initiatives."

"We believe a host of other companies remain very interested in joining the association," Mahaney and Schwartzman said. "If a clear regulatory roadmap is developed and Libra launches successfully, we would not be surprised to see these firms reapply to the association."

CNBC's Michael Bloom contributed to this report.

More:
As Facebook's libra faces headwinds, China is racing to launch its own global cryptocurrency - CNBC

When it comes to trading, there are several steps you can take in order to reduce your exposure to the market extremes of price volatility.

A combination of both technical and fundamental analysis can be used to determine thetrue worth of a company or asset, securing a greater chance of success with a particular investment while reducing your risk along the way.

But for that, you need a plan.

Developing a successful risk management plan is paramount in minimizing unexpected outcomes, translating into an overall reduction in your losses.

A successful risk management plan should also run parallel to your crypto trading journal records, working in conjunction to curb poor trading behavior while simultaneously justifying your fundamental expectations.

Sometimes temptation leads to poor choices and it is no more on display than a market driven by fear and greed.

By reducing harmful or negative trading habits, one can hope to increase profit without putting too much on the table.

A key component of a successful risk management plan is determining what kind of trader you are and where your skills currently lie:

From these personas you can draw a rough idea on where you currently sit in terms of your trading mentality. The idea is to identify what habits are forcing you to lose out and which habits are guiding you to profit.

Try to remain stoic and reasoned, removing emotion from the psychological aspect of trading while relying solely on the information in front of you such as the price, volume, news and trend.

No matter how tempting or promising a particular trade opportunity may appear it is never a good idea to place all of your worth on the line.

Generally, a spread of one particular type of asset class (as well as a generous mix of different asset classes within your portfolio) is an ample measure in reducing your exposure to larger price moves within a particular industry/market.

The volatility of the cryptocurrency market means that any trade, even a seemingly perfect trade, can collapse and result in a significant loss. Therefore, it is recommended that you start investing in 5 or more different coins.

Also remember to take advantage of an exchanges stop-loss feature and use it to your benefit when you are away from trading manually such as times of rest or at work.

Time and again new traders fail to incorporate an adequate exit strategy, often arriving back at their computer to find their beloved basket of crypto have dropped 20 percent and a new trend has developed to the downside. This act not only reduces your risk but allows for greater control over your losses.

Finally, it can be tempting to use a buy and hold strategy where you invest in a coin and refuse to sell for an extended period of time. This passive approach is often tempting to new traders due to its simplicity and is often falsely associated with reducing ones risk.

However, youll unlikely amount to any significant wins by playing it too safe, so dive in, take on the adequate risk and ensure you have a plan mapped out because trading crypto can be a fun and profitable endeavour when executed correctly.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

See-saw image via Shutterstock

Here is the original post:
Mastering Emotions and Managing Risk in Cryptocurrency Trading - Coindesk

The US Securities and Exchange Commission (SEC) has just halted Telegram's massiveand massively hyped$2 billion digital tokensale.

Those halcyon days: In early 2018, exuberant investors poured billions of dollars into Telegrams ambitious plan to launch a global cryptocurrency network. In return, they got rights to digital tokens that Telegram, a messaging app with 300 million monthly users, promised would be useful on its future network. That was slated to launch by October 31 of this year.

The news: That initial exuberance has turned to uncertainty. According to the SEC, Telegram Group and a subsidiary company called TON Issuer Inc. conducted an illegal sale of unregistered securities in the US. The defendants sold 2.9 billion digital tokens, called Grams, to 171 investors around the world, raising $1.7 billion. Since $425 million worth was sold in the US, the SEC, which is supposed to look out for US investors, was paying attention.

Since the planned network hasnt yet launched, and the tokens cant be used for anything yet, they are subject to the same kinds of strict regulations that govern stocks and bonds, says the SEC. That means they should have been registered with the agency, and Telegram should have provided investors with information about its business operations, financial condition, management, and risk factors. We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token, Steven Peikin, co-director of the SECs division of enforcement, said in a statement.

What now? According to Bloomberg, the company is evaluating ways to resolve the agencys concerns, and in fact been in talks with the SEC for 18 months. The company said it was surprised and disappointed by the lawsuit, and now it may delay the launch of its network.

The takeaway: The SEC is not done cleaning up the mess created by the initial coin offering boom of 2017 and early 2018. Its lawsuit against Telegram comes just two weeks after it settled with Block.One, which had raised $4 billion via its own token sale before launching the EOS blockchain network in 2018.

Its not clear why Block.One, which had to pay a $24 million penalty, didnt get as harsh a penalty as Telegram (though it could be that Block.One was more cooperative with the SEC). But the bottom line is what Peikin said: calling something a cryptocurrency doesnt exempt it from existing laws.

Keep up with the fast-moving and sometimes baffling world of cryptocurrencies and blockchains with our weekly newsletter Chain Letter.Subscribe here. Its free!

View post:
Telegram might be forced to put its global cryptocurrency plans on ice - MIT Technology Review