Sberbank has become the first Russian bank to carry out a payment transaction using the blockchain technology, which allows transfers within a few seconds.
The transaction was conducted on the IBM Blockchain platform based on HyperLedger Fabric. According to Sberbank, its own IT infrastructure was used during the procedure. MegaFon, MegaLabs, Alfa-Bank, and IBM have also participated in the transaction.
“The blockchain solution created by Sberbank has allowed us to make the first pilot payment transaction – using IBM Blockchain technology – in the history of the Russian banking industry,” said Sberbank CIB Managing Director Stella Kudachkina.
She added that “the advantage of using this technology when performing settlements is the high speed at which transfers are made: after the money is sent the transaction is recorded on the receiver’s account almost instantly, in real time, unlike the traditional system that is used to make transfers.”
Earlier this year, media reported that banks in Russia were considering safer and faster transactions by adopting blockchain technology. The country’s biggest lenders, including Sberbank and VTB Group, have also been working on a distributed ledger called Masterchain.
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Ukraine’s National Bank, the National Commission for Securities and Stock Market, and the National Commission on Finance Services Market Regulation have supported the initiative to legalize cryptocurrencies in Ukraine.
In their joint statement, the spokespersons for the departments have noted that complex legal nature of cryptocurrencies does not allow one to recognize them as money, currency, a foreign currency, a currency value, e-money, securities, or money surrogates.
Last month, Ukraine’s finance minister Oleksandr Danyliuk said cryptocurrencies will not be banned even though its legal status is yet to be determined.
Still, the issue of their legal status has to take into account the recent trends found in development of such technologies, they wrote.
“The aim of introducing a regulatory framework is to protect the consumer rights, tackle money laundering and other illegal activities, identify the subjects of such operations (financial monitoring), and a mechanism for taxation of such revenues,” the statement reads.
At the same time, the regulators reminded that cryptocurrency investment and operations are highly risky.
“Anyone investing in cryptocurrency has to realize they do it at their own risk,” they noted.
Earlier this week, the city council of Kyiv, the capital of Ukraine, has submitted a draft decree on establishing a regulatory framework for cryptocurrencies to Ukraine’s Parliament and the National Bank.
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President Donald Trump’s nominee for Chair of the Federal Reserve, current Board Governor Jerome “Jay” Hayden Powell, participated in the constitutionally mandated US Senate confirmation process by way of a hearing on 28 November 2017. Bitcoin and “cryptocurrencies are something we monitor very carefully,” Mr. Powell answered in direct questioning about current and future Fed policy toward decentralized currencies.
Incredible valuations. Historic price rise. Mass adoption numbers. The Year of Bitcoin has achieved yet another official milestone: it is now a formal policy consideration by regulators of the world’s largest economy.
Tuesday afternoon in Washington, DC, Jay Powell sat before a sparsely attended, mostly pro-forma senate hearing. A current Fed governor nominated by President Obama to serve a 14 year term, Mr. Powell is widely considered to ease through to confirmation in the Republican-controlled upper body.
Georgia Senator, Republican David Alfred Perdue, Jr took asked the nominee a series of questions. Completely switching topics, he ended his line of thought with queries at the 1 hour and 35 minute mark about a subject sweeping professional finance circles: bitcoin.
Senator Perdue began, “We have another bubble that is some 4 to 5 times the size of the dot com bubble in the late 1990s, and that has to do with the cryptocurrencies like bitcoin,” he said.
Junior Georgia Senator Asks about Bitcoin
Mr. Perdue is junior senator from the Peach state, having been elected in 2014 to a six year office. His background include heading many businesses.
“Bitcoin’s market value now is bigger than all but 29 of the S&P 500 corporations in America,” he continued. “Assuming that this continues, and talking about that bubble, and the size and the growth of these cryptocurrencies, if that continues to grow … to what extent does that effect your ability to effect results from your typical monetary policy options that you typically have as a central bank?”
Nominee Powell answered, “You know, in the long, long run things cryptocurrencies of that nature could matter,” he said. When confirmed, Mr. Powell will be the 16th person to assume chairmanship of the Fed in its 103 year history.
“They don’t really matter today,” Mr. Powell said dismissively. “They’re just not big enough. They’re just not anywhere near close to enough in volume for it to matter for us.”
Senator Perdue then again made parallels between the 1990s dot com boom and bitcoin, implying Mr. Powell should see the same.
“There’s no question the valuations have gone up quite a lot in the last year or so. I don’t have a view on the appropriate level of the valuation, of course,” Mr. Powell explained.
The price of bitcoin, as of this writing, has reached 10,000 USD on global exchanges, skyrocketing hundreds of percent in eleven months.
“From our standpoint, cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy,” Mr. Powell expanded in his answer.
“It’s something we pay close attention to,” the Board Governor noted.
The Senator from Georgia then asked if the Fed were watching technologies used around the world and in companies such as Alibaba with regard to blockchain and cryptocurrencies.
“We are watching all of those technologies. It’s something we have to do, I think. It’s actually something that is kind of enjoyable and interesting,” Mr. Powell smiled.
What do you think of incoming Fed Chair’s comments? Tell us in the comments below!
Images courtesy of: Pixabay, imagur, Wiki Commons.
Do you agree with us that Bitcoin is the best invention since sliced bread? Thought so. That’s why we are building this online universe revolving around anything and everything Bitcoin. We have astore. And aforum. And acasino, apool and real-timeprice statistics.
Outspoken John McAfee has made the bold claim that Bitcoin will be worth $1 mln by 2020.
John McAfee, founder of McAfee Associates a well-known software company has always been Bullish on Bitcoin, in fact, he has even been confrontational on the fact.
In July, with a lot of fear and uncertainty surrounding Bitcoin ahead of its Aug. 1 chain split, McAfee came forward and stated boldly that he was willing to stake his name and up to $10 mln on a bet that the Bitcoin price will move above $500,000 within three years or he would "eat my d**k on national television."
That prediction was seen as ludacris at the time, and many were left wondering how his on-screen promise would play out – however, now that Bitcoin has crossed $11,000, McAfee is not sitting back smugly, but rather raising the bar.
The outspoken tech mogul has now said:
“When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bitcoin at $1 mln by the end of 2020. I will still eat my dick if wrong.”
When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bircoin at $1 million by the end of 2020. I will still eat my dick if wrong. pic.twitter.com/WVx3E71nyD
“Bitcoin fell to $5,600 and since then rebounded. In our view, this move to $5,600 cleaned up weak hands and we no longer feel caution is warranted. … We recommend steady buying of Bitcoin at these levels."
He went on to predict 40 percent growth in seven months, but in all reality, Bitcoin fell short $200 of his $11,500 target this week.
During November, several central banks addressed bitcoin and cryptocurrencies. New Zealand’s central bank has issued a statement seeking to educate citizens of the fundamentals underpinning cryptocurrencies, as well as the implications of such on monetary policy. The senior deputy governor of the Bank of Canada has stated that cryptocurrencies comprise assets or securities, rather than currencies. Brazil’s central bank also addressed cryptocurrencies during November, issuing a warning to investors.
Reserve Bank of New Zealand Does Not Believe Cryptocurrencies Pose Existential Threat to Mainstream Financial Institutions
The Reserve Bank of New Zealand (RBNZ) has published a paper on cryptocurrencies titled “Crypto-currencies – An introduction to not-so-funny moneys.” The 44-page document seeks to “increase public understanding these technologies, highlight some of the risks involved in using crypto-currencies, and discuss some of the potential implications of these technologies for consumers, financial systems, monetary policy, and financial regulation.” The document also details the fundamental underpinnings and history of cryptocurrency, and provides definitions for terminologies relevant to the industry.
The document states that “Crypto-currencies expand the mechanisms by which people can transact with each other, strengthening competitive pressures on payment systems providers.” Despite such, the RBNZ states that due to the “relatively small volume of transactions” conducted using cryptocurrencies, “These new payment mechanisms are unlikely to completely supplant traditional payment systems.” The document also emphasizes the “incompatab[ility] of “the (pseudo) anonymity… of crypto-currency” with credit issuance – concluding that such prevents cryptocurrencies from posing a threat to many functions of traditional financial institutions.
Canada Views Cryptocurrencies as Assets or Securities, Not Currency
Earlier this month, Bank of Canada’s senior deputy governor, Carolyn Wilkins, stated that “so-called cryptocurrencies actually aren’t currencies at all, they’re not money.” Speaking with Bloomberg, Mrs. Wilkins stated “If you look at standard monetary theory… this is really an asset, or a security. And so it should be treated that way, and in fact, that’s the way it’s treated in Canada.”
When asked specifically of ICO’s Mrs. Wilkins stated “I’m not a securities regulator, and it’s not the Bank of Canada’s role to comment on any specific ICO, but… these look more like securities to me than a currency and they should be regulated as such.”
Mrs. Wilkins also expressed enthusiasm for blockchain technology, adding “What is promising… is… the distributed ledger technology that underpins it, because it provides the opportunities to create efficiencies in financial markets and other places that could actually be beneficial to market participants, businesses, and households.”
The Banco Central Do Brazil Issues “Alert on [the] Risks Arising From Custody and Trading Operations of So-Called Virtual Currencies”
The warning emphasizes the lack of protections afforded to investors choosing to trade cryptocurrencies, stating that virtual currencies “are not issued or guaranteed by any monetary authority.” Brazil’s central bank states that “the purchase and safekeeping of virtual currencies” exposes investors to “imponderable risks, including… the possibility of loss of all capital invested.”
Despite the dire tone of the warning, the document states that “the need to regulate [cryptocurrencies] has not been identified to date by international organizations”, adding that “In Brazil, for the time being, no significant risks are observed for the National Financial System.”
What do you make of the central banks’ statements regarding crypto? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Bank of Canada
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