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Palestinian Authority Considering Crypto to Replace Israeli Shekel

The Palestinian government plans to use cryptocurrency as an alternative to the Israeli shekel fiat currency, according to the country’s prime minister.

Palestinian Prime Minister Mohammad Shtayyeh reiterated that his government is considering using cryptocurrency as an alternative to the Israeli shekel fiat currency, English-language local media Al-Monitor reports on July 22.

Shtayyeh said at the opening of the Palestine Center for Computer Emergency Response in Ramallah on July 9 that he’ll consider every possibility to enhance the freedom of Palestinian economy that Israel won’t be able to block. 

During his first appearance on Palestine TV, after first taking office in April, he reportedly said:

“The Palestinian economy has about 25 billion shekels [$7 billion] circulating in the local economy, but we’re not forced to remain dependent on the shekel.”

Al-Monitor explains that the Paris protocol signed in April 1994 by Israel and the Palestinian Liberation Organization vested the Palestinian Monetary Authority (PMA) with the powers of a central bank but without the ability to issue banknotes. The protocol furthermore reportedly stated that the Israeli shekel shall be used “as means of payment for all purposes including official transactions.” 

Economic and social sciences professor at Najah University in Nablus told the outlet:

“If Palestine has its own currency, will it be able to prevent Israel from withholding tax clearance funds or controlling crossings and the movement of exports and imports? The problem of the Palestinian economy is not the currency but rather a complex economic and political reliance on Israel.”

Furthermore, he pointed out that 170,000 Palestinians earn their salaries in shekels, and 80% of the transactions in Israel are in this currency. He concludes:

“Israel won’t accept dealing with another currency, and the shekel surplus predicament in Palestine will remain unchanged.”

As Cointelegraph reported in May 2017, Palestine already voiced intentions to develop a national cryptocurrency at the time.

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Watch Out Ripple, SWIFT Says Its Fastest Remittance is Down to 13 Secs

SWIFT says it conducted a successful trial of instant cross-border transfers in Asia.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) announced a successful trial of instant cross-border transfers in Asia in a press release published on July 18.

Per the release, the trial performed instant payments between 17 banks located in Australia, China, Canada, Luxembourg, The Netherlands, Singapore, and Thailand, taking up to 25 seconds, with the fastest taking 13 seconds. 

The tests involved communication between SWIFT’s Global Payments Innovation (GPI) instant payment platform and Singapore’s domestic instant payments solution, FAST.

SWIFT also explains that its GPI instant system uses existing payments infrastructure, this is expected to result in lower adoption costs for interested institutions. The firm’s head of banking Harry Newman commented:

“SWIFT envisages that cross-border payments will become as convenient as domestic transactions, and the successful testing across multiple corridors between Europe and North America to Asia Pacific confirms the important role that GPI Instant will play in making that bold vision a reality.”

As Cointelegraph reported in June, SWIFT will allow distributed ledger technology firms to use its GPI platform.

More recently — last week — news broke that Bank of America has filed for a patent for a settlement system citing the Ripple ledger, according to a filing on Google Patents. Notably, Ripple-based systems competing with SWIFT are able to typically complete a transaction in 5 to 7 seconds according to a Quora answer submitted by Ripple CTO David Schwartz.

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Bank of America Files Patent for Settlement System Citing Ripple

Bank of America has filed a patent application for a settlement system citing the Ripple ledger.

Bank of America has filed for a patent for a settlement system citing the Ripple ledger, according to a filing on Google Patents.

The patent in question — the application of which was published on June 6 — describes a system using distributed ledger technology (DLT) as an interbank communication tool. The proposed system would enable real-time settlement with transactions being communicated through a shared, decentralized ledger to which both the banks would have access.

The decentralized network would both verify the identity of the payer and the payee and enable communication between the institutions. Notably, multiple illustrations included in the patent explicitly cite Ripple DLT. Ripple’s base asset and proposed settlement gateway asset XRP is not mentioned in the patent.

In June, news broke that Siam Commercial Bank, Thailand’s largest commercial bank, denied any plans to start using Ripple’s XRP token, contrary to earlier indications. The denial came after the bank tweeted that an “XRP system will be announced soon” on June 5.

As Cointelegraph reported earlier this month, Ripple incubator and investment arm Xpring has distributed $500 million to over 20 XRP projects — including the blockchain-based gaming platform Forte — since its launch in May 2018. The aim of the incubator is to fund the development of use cases for Ripple’s XRP token.

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Crypto Banking Firm FairX Shuts Down Due to Lack of Financing

FairX, a financial services company involved with banking and digital assets, has shut down its operations as it failed to establish a licensed national bank.

FairX, a financial services company involved with banking and digital assets, has shut down its operations as it failed to establish a licensed national bank.

According to a FairX Twitter thread on July 19, the company has fallen short of setting up a licensed national bank due to a lack of funding. FairX was trying to raise funds for the planned bank over the past 14 months, which it described as:

“… a new, licensed, fully regulated national bank, modeled as a financial market utility, that would work with individuals and banks to create a dematerialized bank deposit, denominated in USD. The bank was Frank Financial.”

“This dematerialized bank deposit would act, in many respects, similarly to a stablecoin, except a stablecoin this was not. A stablecoin, by its definition, is not an asset that can settle transactions between banks in the context of, say, ACH [automated clearing house] or CC [credit card] transactions,” the posts further explained.

The company stresses that it succeeded in introducing its business idea to regulators, complying with Know Your Customer, Anti-Money Laundering and counter-terrorism financing rules, as well as in receiving positive feedback from regulators. After initiating its binary stage, FairX realized that it needed another injection of capital.

At that point, the crypto investment community backed out purportedly due to the bank’s perceived centralization.

Yesterday, Cointelegraph reported that Indian cryptocurrency exchange Cryptokart ceased its operations. Cryptokart’s founder, Gaurang Poddar, described the shutdown of the exchange as “difficult, given the hard work we’ve put in” but concluded that overall the experience was positive. Poddar said he was proud of the platform and seemed intent on remaining in the field, stating, “If you know anyone interested in launching their own exchange, please let me know.”

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European Central Bank Policymaker Says Stablecoins Not Cause for Alarm

ECB’s governing council Jens Weidmann has said that while stablecoins offer opportunities for prosperity, users should be vigilant.

A European Central Bank (ECB) official has stated that users should be aware of the risks associated with the stablecoins use, but not to be alarmed.

As Reuters reported on July 18, member of the ECB’s governing council and president of the Deutsche Bundesbank, Jens Weidmann said that stablecoins — digital currency designed to minimize price volatility by being pegged to another asset — offer users opportunities for prosperity, however users should be vigilant in regards of the associated risks.

Weidmann delivered his comments at a news conference at a meeting of the G7 finance ministers and central bankers. “There is no reason to be alarmed but there is reason to be vigilant,” Weidmann stated.

Weidmann also spoke in favor of Facebook’s Libra cryptocurrency project. He specifically argued that global regulators should not suppress the project in its infancy, adding that digital currencies such as Libra can be attractive to consumers in the event that they deliver on their promise.

However, a range of other policymakers do not share Weidmann’s view on Libra, with French finance minister Bruno Le Maire saying that the G7 “cannot accept private companies issuing their own currencies without democratic control.”

Brad Sherman, a United States Democratic congressman, recently claimed that “Mark Zuckerberg is sending a friend request to oligarchs, drug dealers, human traffickers and terrorists” by launching Facebook’s Libra cryptocurrency.

Notably, at the G7 conference, the Financial Action Task Force — a G7-initiated intergovernmental organization that promotes legal, regulatory and operational measures that aim to fight money laundering on a global scale — approved a new, global cryptocurrency payments network that would be similar to Japan’s proposed SWIFT.

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Overstock Subsidiary and Tokenization Firm tZERO Announces New Management

The tokenization firm tZERO has announced three new executive appointments, including a former Barclays member who will head tokenization dealings.

The blockchain-based subsidiary of retail giant Overstock,  tZERO, has appointed three new managers. The company announced the new hires in a press release on July 17.

According to the announcement, new appointees Brooke Navarro, Michael Mougias and Alexandra Sotiropoulos have been official managers since July 15. TZero states that these new executives are the firms head of issuance, head of investor relations and head of communications, respectively.

The CEO of tZERO, Saum Noursalehi, remarked on the intended role for these new hires, saying:

“On the issuance front, Brooke will drive strategic development of our security token ecosystem by focusing on the supply-side of the equation — working with issuers to bring more quality assets to the PRO Securities ATS. Mike and Alex will spearhead our efforts to continue to develop strategic market positioning for tZERO and engage with current and prospective investors, analysts, media and other tZERO stakeholders.”

Brooke Navarro will coordinate with regulated broker-dealer affiliates and partners to seek out companies interested in a token offering or otherwise tokenizing existing capital tables. Navarro is also going to be in charge of pursuing strategic partnerships in order to drive adoption of tZERO’s technology.

Navarro was formerly a managing director in investment banking at Barclays as a leader in the company’s technology, media and telecom equity capital markets team. Navarro reportedly acted as an advisor to Barclays clients for initial public offerings, follow-ons, convertibles and private placements.

As previously reported by Cointelegraph, tZERO partnered with the producers of a gaming biopic in development — “Atari: Fistful of Quarters” — to tokenize the film. The token is called “Bushnell” and token owners will become shareholders of the project, and receive a portion of the movie’s profits as such. Token holders will also apparently be able to vote on the movie trailer and have influence over which actors are hired.

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Share Internet Data Launches Banking App in Tandem With LDJ Capital

Internet crowdsourcing company Share Internet Data has partnered with LDJ Capital to incorporate a banking solution into its Internet-sharing platform.

Internet crowdsourcing company Share Internet Data Ltd (SID) has partnered with private equity firm LDJ Capital to launch a blockchain-based digital banking solution. The new digital banking app is called LDJ Digital, according to a press release on July 16.

According to the announcement, LDG Digital can function as a debit card and it supports both fiat money and cryptocurrencies. Moreover, the professed goal of LDJ Digital is to provide banking services to the unbanked, as per the report.

LDJ Digital will reportedly be a part of the existing SID platform and is based on its core technologies and principles. The SID and blockchain technology underpinning LDJ Digital will purportedly make banking accessible and affordable for the unbanked, the press release says.

SID reportedly allows users to provide Internet to other users via its mobile app, somewhat like a mobile hotspot. However, SID users do not have to acquire a password in order to gain hotspot access; instead, the app automatically generates a one-time-use password when SID users are in proximity of one-another. 

As per its website, SID has completed an Initial Token Offering and uses blockchain-based contracts to trade tokens in exchange for Internet usage.

LDJ Digital CEO Jose Merino commented that financial inclusion is a natural upshot of a free Internet ecosystem:

“Free access to the internet opens the floodgates of access to a host of other global resources. Financial inclusion is one of logical results of this. The SID ecosystem is setup to support a robust community that embraces educational, social, and financial inclusion among others.”

As previously reported by Cointelegraph, Napster creator Shawn Fanning’s company Helium performed a limited launch of the company’s Internet of Things (IoT) hotspot devices in June. This project also aimed to create a decentralized Internet ecosystem, and further intended to provide an array of use cases harnessing the devices’ sensing mechanisms. Use cases included tracking pets and preventing bike theft via location-detecting sensors.

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Post-Hearing: Ranking Senate Committee Members Discuss Regulations

Senate Committee Members discussed regulation concerns with big tech companies in a post-hearing press conference.

United States Senators Mike Crapo and Sherrod Brown, respectively the Senate Banking Committee chair and ranking member, shared their views on crypto regulations. Both appear to want comprehensive policy for big tech companies.

The senators made their remarks while speaking with the press following the Senate Banking Hearing on Facebook’s Libra on July 16.

Senator Crapo stressed the importance of building an overarching regulatory framework for data protection — not just for Facebook, but for all Internet companies looking to launch their own cryptocurrencies, á la the Financial Stability Oversight Council for banks. Crapo said:

“We’ve got to look at how we structure data protection in the United States […] We need to move to a comprehensive approach. What that structure exactly is, I can’t tell you.”

When a reporter asked whether Crapo was calling for a “comprehensive privacy law,” Crapo confirmed that he was. 

Senator Brown appeared to agree with Crapo, saying “it will be hard to do something comprehensive, but I hope we can.”

Senator Brown also discussed how the public no longer trusts big tech companies:

“Clearly, Americans don’t trust Wall Street. They now are putting big tech and big banks in the same category. Because they’ve seen the betrayal and the undermining of our democratic values in Facebook and in other tech companies.”

Brown also discussed a bill under discussion with the House Financial Services Committee, “Keep Big Tech Out Of Finance Act,” which would make it illegal for big tech companies in the U.S. to run a digital asset service such as crypto:

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”

Brown remarked:

“I like that she’s doing that. I don’t know yet. I don’t know enough about what she’s doing but I like that she’s raising that issue and wanting to put pen to paper.”

As previously reported by Cointelegraph, libretarian Ron Paul recently spoke up again about his views on cryptocurrencies. According to Paul, the government should not be regulating the crypto space for any purpose other than to prevent demonstrable fraud.

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IMF: Network Effects Could Spark Blaze of Digital Money Adoption

The International Monetary Fund has argued that network effects could spark the blaze for the mass adoption of new digital monies.

The International Monetary Fund (IMF) has argued that network effects could spark the blaze for the mass adoption of new digital monies.

In a fresh report published on July 15, the IMF aims to create a conceptual framework for categorizing new digital monies such as Facebook’s Libra and stablecoins as well to think through the implications of their emergence for central bank policy.

In its analysis of e-monies — including but not limited to blockchain-based assets — the IMF identifies six factors that could drive their rapid growth for payments: convenience, ubiquity, complementarity, low transaction costs, trust and network effects. The report states:

“The first five reasons may be the spark that lights the fire of e-money; the sixth is the wind that could spread the blaze. The power of network effects to spread the adoption of new services should not be underestimated.”

To bolster its claims, the IMF points to the rapid switch from email to SMS and from SMS to social messaging platforms such as Whatsapp, noting that adoption of the latter was exponentially faster than the initial switch to email — noting that its 1.5 billion user base is attributable more to word of mouth than to formal marketing strategies.

The IMF also creates a taxonomy indicating its view of the thriving digital money sector, notably adopting the blockchain industry’s cornerstone principle of decentralization as one of its principle classificatory parameters:

 “Money trees.” A taxonomy of the digital money landscape

 “Money trees.” A taxonomy of the digital money landscape. Source: IMF 

Devoting a section of its analysis to the question of central bank digital currencies (CBDCs), the IMF proposes a hybrid approach that would be established by a public-private partnership — defining the proposed asset as a synthetic CBDC (sCBDC). 

A central bank would have limited responsibility as regards a prospective sCBDC, offering settlement services — including access to its reserves — to e-money providers, who would, in turn, be robustly regulated. This hybrid — and not full-fledged — sCBDC would stand to benefit from the comparative advantage of the private sector to innovate and interact with consumers while relying on the central bank to provide trust and efficiency, the report argues. The IMF concludes:

“Much lies in the hands of central bankers, regulators, and entrepreneurs […] but one thing is certain: Innovation and change are likely to transform the landscape of banking and money as we know it.”

This spring, the IMF managing director Christine Lagarde said that blockchain innovators are shaking the traditional financial world and having a clear impact on incumbent players, having previously acknowledged that the organization could potentially release its own digital asset in future.

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Bitcoin Suisse Applies for a Banking License in Switzerland

The company has approached regulators for two licenses: banking and securities dealing, a press release confirmed.

Swiss crypto broker Bitcoin Suisse has applied for banking and securities dealer licenses from Switzerland’s finance regulator, the company confirmed in a press release on July 16. 

Bitcoin Suisse, which forms part of the country’s Crypto Valley Association, said it had submitted requests to the Swiss Financial Markets Supervision Authority (FINMA).

The reason, it said, was in order to adapt to a rapidly-changing regulatory landscape vis-a-vis cryptocurrencies, even in Switzerland, which is known for its proactive stance on the industry.

“These licenses would allow Bitcoin Suisse to further expand its offering with regulated services and products, thereby strengthening its position as a leading provider of crypto financial services,” the press release stated. 

In preparation for the license going ahead, the company also revealed it had deposited 45 million Swiss francs ($45.7 million) with an unnamed local institution, “as collateral for a default bank guarantee, securing client fiat deposits and pooled crypto deposits.”

That figure would soon reach 55 million francs ($55.8 million), the press release added. 

In applying for bank status, Bitcoin Suisse joins a number of other hopefuls from the cryptocurrency space, these including Crypto Valley’s own Bank Seba and blockchain startup Signum. 

Last month, fellow Swiss entity Dukascopy announced it would launch and begin testing  Ethereum-based stablecoins pegged to currencies including the franc and the euro.