The United States House of Representatives Financial Services Committee has passed a resolution to form the Task Force on Financial Technology, …
The United States House of Representatives Financial Services Committee has passed a resolution to form the Task Force on Financial Technology, according to a press release by the committee on May 9.
The new task force purports to “examine the current legal framework for fintech, how fintech is used in lending and how consumers engage with fintech.”
Congressman Stephen Lynch (D), the newly appointed chair of the Task Force on Financial Technology, commented in a press release on the need for the committee to reevaluate how to best protect consumers using new fintech:
“The lives of consumers are changing with user-friendly financial service apps but these emerging technologies come with vulnerabilities and the need to reevaluate our consumer protection standards.”
Some noted crypto-friendly representatives such as Warren Davidson (R) and Tom Emmer (R) will be joining the newly-founded fintech task force.
In April, Davidson reintroduced the Token Taxonomy Act with fellow representative Darren Soto (D), with the intent of providing regulatory certainty and discluding cryptocurrencies from securities laws.
Emmer proposed three pro-blockchain and crypto bills in 2018: the Resolution Supporting Digital Currencies and Blockchain Technology, the Blockchain Regulatory Certainty Act, and the Safe Harbor for Taxpayers with Forked Assets Act.
As previously reported by Cointelegraph, a number of CEOs at leading banks testified before the U.S. House Financial Services Committee in April about blockchain technologies and cryptocurrencies. During this testimony, Davidson called attention to the regulatory certainty issues surrounding cryptocurrencies in the U.S., saying that it was causing the country to fall behind the curve in fintech.
Some have called Facebook’s stablecoin a primary competitor to Bitcoin, representing the first established company to issue its own currency.
Facebook’s interest into cryptocurrency, with the forthcoming Facebook coin likely to be announced in Q3 2019, is finally having its effect on the crypto markets.
The blockbuster rumor that Facebook was in the process of developing a stablecoin for its messaging platform had a small impact on the crypto markets at the time, in large part due to the “crypto winter” for coin prices throughout 2018. Plain and simple: excitement and investor interest in cryptocurrency hit a lull at the end of last year and beginning of 2019, as weary traders and retail investors all but fled the market. The rise in coin prices throughout the first quarter of 2019 have been enough to reignite digital assets, with Facebook making a serious foray into cryptocurrency grabbing the attention of institutional investors.
Some have called Facebook’s stablecoin a primary competitor to Bitcoin, representing the first established company to issue its own currency. However, Facebook’s impact upon the marketplace for cryptocurrency and its adoption has been more in favor of the entire of the industry than seeking to crush it through competition.
For years, cryptocurrency adoption ran into the roadblock of not having major names using or developing digital assets of their own. While Overstock.com was one of the larger online retailers to accept and support Bitcoin, industry pundits remained skeptical on whether a larger enterprise would both using digital currencies. Walmart and Amazon appeared favorites during the bullish run for crypto in 2017, owing to the fact that both companies operate on a large enough scale to benefit from the improved efficiency of blockchain.
However, Facebook has become the frontrunner in establishing massive interest for cryptocurrency. The Facebook coin will likely find a following amongst the 2+ billion users of the social media platform, particularly in developing countries where digital payments provide a welcome alternative to untrustworthy government fiat.
Nonetheless, the real industry growth comes from the exposure of cryptocurrency to such a massive user base. The current divide between a service like Venmo or PayPal and that of Bitcoin is still large enough to buffer otherwise tech-savvy users. With Facebook bringing cryptocurrency to the masses, the advent of token payments and digital alternatives to fiat becomes all the more appealing, particularly when targeted to the global audience that the social media platform commands.
The massive rise in valuation for Bitcoin, which took the coin above $6000 for the first time this year, is in no small part being drive by positive sentiment generated out of Facebook. The company recently announced a landmark shift in its cryptocurrency advertising policy that is clearly paving the way for their own stablecoin. Rather than repelling the industry and generating all-too familiar stereotypes of vagrancy, Facebook is now becoming one of the primary platforms of embracing the industry.
While Facebook Coin may become a substantial competitor to Bitcoin in the future, for now news of the social media platform is having a synergistic effect. Institutional and retail investors alike are changing their predicted outlook for cryptocurrency, and funneling their investment into the increasing market dominance of Bitcoin.
In a telephone interview with Kitco News, Randy Smallwood, CEO of Wheaton Precious Metals said that simple physics proves that virtual currency …
Editor’s Note: Get caught up in minutes with our speedy summary of today’s must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!
(Kitco News) – The debate between gold and cryptocurrencies continues to be waged throughout financial investment circles, with one mining executive saying gold will ultimately prove to be the long-term asset to own.
In a telephone interview with Kitco News, Randy Smallwood, CEO of Wheaton Precious Metals said that simple physics proves that virtual currency will never replace gold.
“The beauty of gold is that it’s a solid asset. It’s been around for a very long time and will continue to be around,” he said. “The problem with cryptocurrencies is that the market is always changing and you constantly have to watch it.
Smallwood added that hundreds, if not thousands, of companies, are currently competing with each other to create the next exciting cryptocurrency. He added that in five years the leading digital currency Bitcoin will probably look like a dinosaur compared to new products.
“All cryptocurrencies are virtual and therefore are replaceable,” he said. “But there is only one type of gold.”
Wheaton Precious Metals CEO Randy Smallwood
Smallwood said that although the gold market doesn’t have anything to fear with bitcoin or other virtual currencies, the precious metal continues to face considerable headwinds from resilient strength in the U.S. dollar.
“The U.S. dollar remains the best of a bad bunch among global currencies,” he said. “But investors need to ask themselves: how long can this last?”
Smallwood noted that while gold continues to suffer against the U.S. dollar, it continues to dominate other currencies and is trading near multi-year highs against the euro, British pound and Canadian dollar; the precious metal is near record highs against currencies like the Australian dollar.
“It says something when gold is at record highs against so many currencies and I think it’s only a matter of time before it catches up to the U.S. dollar,” he said. “It’s difficult to see how the U.S. dollar will remain strong when you look at the government’s fiscal management.”
Although investor interest in the mining sector remains dreary, Smallwood said the companies need to focus on creating shareholder value and eventually the market will turn. His comments come after the company reported first-quarter adjusted net earnings of $56.5 million, or 13 cents per share, in line with expectations.
However, the company surprised markets with record gold sales of 115,000 ounces for the first three months of the year.
“Investors need to pay attention to commodity market velocity. When we start seeing consistent upward pressure, investors will feel more confident and start looking to reinvest. The companies that keep their promise and show how they are building shareholder value will be the ones that benefit from renewed interest,” he said.
Investor interest in gold has been muted with prices struggling to find enough momentum to push back to $1,300 an ounce. June gold futures last traded at $1,284.80 an ounce.
A Rochester Institute of Technology student is among those charged by federal indictment in connection with a scheme to gain control of cryptocurrency wallets and accounts.
Reyad Gafar Abbas, 19, was one of six people charged in a 15-count indictment by the U.S. Attorney’s Office in the Eastern District of Michigan. Three other individuals were charged by criminal complaint.
Abbas is a third-year computer engineering student currently on leave this semester, the school confirmed.
The six individuals are tied to a “hacking group known to its members as ‘The Community,'” according to a release from the U.S. Attorney’s Office.
“The members of ‘The Community’ charged in the indictment endeavored to gain control of victims’ cryptocurrency wallets or online cryptocurrency exchange accounts and steal victims’ funds,” the release continued. “It is alleged in the indictment that the defendants executed seven attacks that resulted in the theft of cryptocurrency valued at approximately $2,416,352.”
Abbas and five others are charged with conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.
Also indicted are:
Conor Freeman, 20, of Dublin, Ireland;
Ricky Handschumacher, 25 of Pasco County, Florida;
Colton Jurisic, 20 of Dubuque, Iowa;
Garrett Endicott, 21, of Warrensburg, Missouri;
Ryan Stevenson, 26, of West Haven, Connecticut.
Three former employees of mobile phone providers were charged by criminal complaint with wire fraud in association with the alleged crimes. They are:
Jarratt White, 22 of Tucson, Arizona;
Robert Jack, 22 of Tucson, Arizona;
Fendley Joseph, 28, of Murrietta, California.
The hacking activities began in December 2017 and continued through May 2018, the indictment said.
The indictment alleges that members of “The Community” use a method known as “SIM hijacking” to steal the victims’ identities. Prosecutors said, “Cryptocurrencies, also known as virtual currencies or digital currencies, are online media of exchange. The most famous of these is Bitcoin. Like traditional currency, they act as a store of value and can be exchanged for goods and services. They can also be exchanged for dollars.”
Through “SIM hijacking” or swapping, members of the community allegedly exploited mobile phone numbers, which are a “common cyber-security weakness,” prosecutors said. This allowed members of the organization to gain control of the victims’ mobile phone numbers and resulted in phone calls and messages being routed to devices controlled by Community members.
The practice was arranged by bribing employees of a mobile phone provider, the indictment alleged. In other instances, members of the organization allegedly posed as the victim and contacted customer service for different mobile phone providers and requested that the victim’s number be swapped to a SIM card controlled by the Community.
And once the Community had control of a victim’s phone number, the number “was leveraged as a gateway to gain control of online accounts such as a victim’s email, cloud storage, and cryptocurrency exchange accounts,” the indictment alleged. The Community members allegedly would reset online account passwords and request two-factor authentication codes to bypass other security measures.
White, Jack, and Joseph were employed by the mobile phone service providers and were bribed by Community members in order to steal identities, prosecutors said.
On Feb. 15, 2018, Community members allegedly “collaborated” to activate a SIM card and “fraudulently link” it to a victim’s mobile phone number, which would allow them to pose as the victim, the indictment said.
One of the Community members posed as the victim to his mobile phone provide and then used the number “as a starting point” to “seize control of multiple online accounts,” the indictment said. That included an email address, DropBox account, cryptocurrency exchange account and cryptocurrency wallet.
Abbas was allegedly among those from the Community who transferred $114,705 from the victim’s cryptocurrency accounts to accounts they controlled.
“Mobile phones today are not only a means of communication but also a means of identification,” United States Attorney Matthew Schneider said in a release. “This case should serve as a reminder to all of us to protect our personal and financial information from those who seek to steal it.”
The Community members allegedly organized activities through online forums and “over diverse channels of communication” like Discord, Skype, Signal, Wickr, and Telegram, the indictment said.
“Stolen funds from a successful attack were divided among members of the Community that participated in that attack,” the indictment said.
Immigration and Customs Enforcement special agents and Irish law enforcement authorities worked together on the case.
The race is heating up among competitors in the cross border payments sector of cryptocurrencies. At the forefront has always been Ripple Labs, …
Cross border payments represent one of the most self-evident use cases of cryptocurrencies. Digital currencies move across borders faster than traditional payment pathways, with reduced friction points and no need for an intermediary.
As central and commercial banks continue to trial the application of blockchain-based cross border payments, it’s not yet clear which players are in the best position to win. Here are some of the runners at the front of the race:
Bank Of Canada And Monetary Authority Of Singapore Conclude Trial
Based on Corda at the Canadian side and JPMorgan’s Quorum on the Singaporean side, the central banks of Canada and Singapore concluded a trial of distributed ledger technology (DLT)-based cross border payments early this month.
At the World Economic Forum earlier this year, it was revealed that a number of central banks had considered the possibility of using DLT to enhance “banking and payments system efficiency, payments security and resilience, financial inclusion and more.” However, according to the report, their results were mixed.
Giants Competing For A Slice Of The Potential Pie
The race is heating up among competitors in the cross border payments sector of cryptocurrencies. At the forefront has always been Ripple Labs, which boasts over two hundred banks and payment companies using their RippleNet platform. A smaller number use Ripple’s xRapid network, which executes payments using XRP.
But Ripple is beginning to see challengers in the race. Jamie Dimon, the long-standing CEO of JPMorgan and a notorious cryptocurrency cynic, announced in February the creation of the JPM Coin, a stablecoin pegged to the US dollar, designed for use among its wholesale banking customers.
JPM Coin is based on a permissioned blockchain, a closed network which is anathema to many in the cryptocurrency community. For JPMorgan, this closed network is a strength rather than a weakness.
Being pegged to the dollar, its crypto would also avoid exposure to the wild price fluctuations affecting XRP and other digital currencies. However, with four-second transaction speeds, the fluctuating value ranks low on the risk of Ripple’s worries.
IBM’s World Wire And The ING-R3 Partnership
In March, IBM announced the launch of World Wire, a payments platform for use in the banking sector. It has already secured Letters of Intent from six banks. The platform will use the Stellar blockchain to secure the flow of funds, with banks using native digital currencies for internal transfers and Stellar’s XLM as the medium for inter-bank transactions.
One such application is Corda’s Universal Settler Application, which is fueled by XRP. Should ING activate cross border facilities through that application, it will add another arrow to Ripple’s quiver, despite R3 and Ripple Labs ostensibly being competitors.
Coinbase’s Green Light For Ripple
After an anxious wait, in February Coinbase finally gave the Ripple Army what it had been demanding: listing on the exchange. Since then, the American giant has launched fee-free internal transfers between Coinbase users for XRP and Circle’s USDC.
Coinbase’s decision to remove fees from XRP and USDC transactions may prove a boon to Ripple Labs and the exchange. Given their suitability for smaller transaction amounts, the most likely users of fee-free XRP transfers on Coinbase are those sending remittances to countries like the Philippines. That could mean an expanded global user base for Coinbase and XRP becoming, as its army would say, “the standard.”
Cross Border Payments Are Becoming Easier, But Remain Centralized
Cross border payments are becoming easier and cheaper with cryptocurrencies and it is only a matter of time before they become standard practice.
The relatively centralized XRP has long been a lightning rod in the crypto community. But Ripple Labs has got the jump on Stellar and other cryptocurrencies in terms of cross border payments.
Given that Ripple’s leading competition is now with stablecoins and bank-issued assets on permissioned blockchains, the company still has a chance to demonstrate some of the advantages of decentralization through its payments networks. If Ripple Labs does bring crypto into the realm of everyday use, Brad Garlinghouse may find his way back into the good graces of the crypto community.