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Binance Backs $32 Million Funding for Unicorn Founder's Crypto Stablecoin

Yet another stablecoin is attracting big investors.

Announced Tuesday, the founder behind a $1.4 billion startup unicorn called TMON is revealing he has raised a $32 million seed round to build a stablecoin called Terra. But while a number of startups have deployed stablecoins – cryptocurrencies engineered to track the price of another asset, usually fiat currency – Terra comes with a notable addition: an existing user base.

Created by Korean entrepreneurs Danial Shin, who founded and chairs TMON, one of the top e-commerce websites in South Korea, the Terra project is launching with a significant number of partners that already reach 40 million customers. Those partners, who will together form the Terra Alliance, a group of e-commerce sites that are interested in incorporating the stablecoin into their business, include Woowa Brothers, Qoo10, Carousell, Pomelo and TIKI.

According to a spokesperson for the project, those companies, combined, take in $25 billion in sales.

“We’ve banded together all the e-commerce platforms in Asia that are not called Alibaba or Amazon to push Terra into the hands of many many people,” Shin told CoinDesk.

It’s no wonder that the round includes quite a few notable crypto investors, including Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, Arrington XRP, Binance and others who were not disclosed.

“We are pleased to support Terra, which sets itself apart from most other blockchain projects with its established and immediate go-to-market strategy,” said Polychain’s Karthik Raju in a statement.

Echoing that, Ella Zhang, head of Binance Labs, said in a statement:

“While we see many stablecoins coming out, Terra’s journey is especially meaningful as they are designing one of the few price-stable protocols with existing, working and strong go-to-market strategy and usage.”

That use, according to Shin, is in acting as an economical digital payment system, compared to credit cards.

He told CoinDesk, that a significant portion of TMON’s annual losses take the form of credit card fees. And he’s sure other retailers experience the same.

That said, if companies like his can lower transaction fees dramatically, he believes they stand a better chance against the industry giants.

For the new alliance of companies, “the commitment really is that they will work together on a more efficient form of payment, obviously using blockchain technology,” he continued.

A two-token system

To do that, the Terra protocol uses two tokens: terra and luna.

Investors in the seed round bought tokens from a pool of 400 million luna tokens (a fixed supply of one billion luna tokens will be created) set aside for them.

These luna tokens function as collateral on the network. Their sale will supply an initial reserve that will help stabilize the price versus fiat, much as Tether does now. The other token, terra, will act as the day-to-day payment method that consumers will use when the protocol goes live. It will be emitted as needed based on demand.

Then every time a transaction happens on the network, a tiny transaction fee will be paid to holders of Luna.

Shin told CoinDesk:

“Luna is essentially a decentralized equity akin to Visa and Mastercard.”

He continued: “What we’ve learned watching Visa and Mastercard stock prices every year, it’s very smooth.”

Much like other stablecoin projects, oracles on the network will monitor supply and demand. As terra’s use grows, it will algorithmically issue new tokens.

The advantage to e-commerce consumers and merchants will be that these new issuances will be used to provide discounts to people who use the crypto token. So, for example, if the protocol has issued a new lot of terra, merchants might be able consumers a 10 percent discount on purchases made with the token – that is until the new supply runs out.

“As we integrate with more e-commerce partners, we are able to distribute that money back to e-commerce companies and their consumers in the form of kickbacks and discounts,” Shin said.

In this way, the project seems focused on one of bitcoin’s early touted use cases, as a cheaper digital payments rail as compared to the incumbents.

What Terra still needs, though, is a host blockchain – a big question for many projects today. The protocol will run on top of one of the existing projects; Shin said either ethereum, EOS, Orbs, messaging giant Kakao’s Ground X or the forthcoming project from Upbit, one of Korea’s exchanges.

But Shin doesn’t seem phased by that, telling CoinDesk that even though the focus will first be on the Asian market, that’s just the start of the project’s aspirations.

“We thought deploying the design in the U.S. where crypto adoption is very low, makes very little sense,” Shin said, adding: “I think the ambition is global.”

Image via Tmon Foursquare

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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American Express Thinks Blockchains Could Help Prove Payments

American Express is on the hunt for better ways of proving when transactions occur and a new patent filing suggests the financial services giant may be looking at blockchain as part of a possible solution.

In a patent application released by the U.S. Patent and Trademark Office last week, American Express Travel Related Services describes using a “blockchain-based system” in order to receive “payment confirmation including a transaction amount and a merchant identifier.”

The concept is aimed at adding to what AmEx calls the “limited” number of options for generating quality evidence that payments happen between merchants and their customers “beyond a receipt or ticket.

AmEx’s patent highlights the tech’s role in retaining “transaction data, contract data, proof-of-payment data, identification data, and/or other information as desired,” with the idea being that a blockchain network – possibly a public one – would serve as an extra layer of proof for transactions that take place on AmEx’s network.

As a result, the potential applications of such a system are quite varied, the company contends.

American Express says that data can be used to “unlock a hotel, rental or shared economy property door using the card (e.g., that was used for the payment) to look up proof of payment on a blockchain.” Moreover, “the system may be leveraged to provide ticketless access to venues (e.g., movie theater, sports event, concert, etc.) to a customer,” and so forth.

While the decision on whether this blockchain system will be hosted on a private, public or consortium network is up for grabs, the application does highlight how “public networks may leverage the cumulative computing power of the network to improve security.”

This patent application by American Express is the latest in a series that have been launched as early as October of last year when the same branch of the company filed for a different patent related to customer rewards.

Fast forward to today and the company has indeed begun initial trials with a custom Membership Rewards program for cardholders, leveraging Hyperledger’s blockchain technology, which it partnered with last January.

Payment terminal image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Purchase with Credit/Debit Cards on Abra

Abra, the multicoin cryptocurrency wallet platform has launched a new feature that allows users to purchase Bitcoin using their credit/debit cards. The company announced the move in a blog post on Thursday (July 12, 2018). Abra CEO, Bill Barhydt believes that BTC can reach $50,000.

Seamless Bitcoin Purchase

With the newly launched feature, Abra users now have an additional method of buying BTC. Abra inked a partnership deal with Simplex to provide the service. Before the launch, only users in the United States could use their credit/debit cards to purchase Bitcoin on the platform, via American Express.

By introducing this new feature, the platform aims to simplify the BTC purchase process, ensuring a seamless user experience. According to the company using a VISA or MasterCard to buy Bitcoin offers numerous advantages over other purchase options. The benefits range from faster processing time to enhanced availability.

BTC purchase on Abra via credit/debit card has a minimum and maximum limit of $50 and $20,000 respectively. The coins purchased can be kept on the platform or transferred to another wallet service.

The credit/debit card purchase feature is available to Abra users in more than 75 countries around the world. The coins purchased can be available in less than half an hour depending on the blockchain traffic at the time.

Abra CEO Predicts Bitcoin Price to Reach $50,000

In a related development, Bill Barhydt recently predicted that Bitcoin would one day reach the $50,000 milestone. Barhydt, however, didn’t provide any timeline for when BTC would achieve this high. The Abra chief also downplayed the bull rally of late 2017 saying that crypto enthusiasts “got way ahead of themselves.”

Barhydt didn’t provide any analysis to back his prediction. Macroeconomist, Peter Tchir believes that most BTC price predictions are made with specific motives in mind on behalf of the analyst. Writing recently for Forbes, Tchir encouraged traders to disregard predictions that didn’t have any empirical analysis to back the proclamation.

Presently, Bitcoin is in the midst of a sustained bear dip that has seen prices plummet by more than 60 percent since the start of 2018. BTC permabulls will be hoping for another price surge that can catapult the top-ranked crypto to a new all-time high.

What do you think about the credit/debit card BTC purchase feature on the Abra platform? What are your thoughts concerning the Abra CEO’s BTC prediction of $50,000? Keep the conversation going in the comment section below.

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US Bank Wells Fargo Bans Crypto Purchases With Its Credit Cards

San-Francisco-based bank Wells Fargo has announced that it will no longer allow its customers to purchase cryptocurrency using its credit cards, Fortune reported June 11.

Wells Fargo, which is the third largest bank by assets in the US, said that its customers are now prohibited from purchasing digital currency on their credit cards issued by the financial institution. A bank spokesperson said that the decision was made in order to avoid “multiple risks” associated with cryptocurrency usage:

“Customers can no longer use their Wells Fargo credit cards to purchase cryptocurrency. We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment. This decision is in line with the overall industry.”

However, the spokesperson added that the bank “will continue to evaluate the issue as the market evolves.”

With this move, Wells Fargo joins a wave of financial institutions banning the purchase of cryptocurrency with their credit cards. In February, three banking giants J.P. Morgan Chase, Bank of America, and Citigroup announced they would no longer permit credit card purchases of cryptocurrency. Later that month, J.P. Morgan Chase said that financial institutions can “face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies.”

The list of banks which bar customers from buying crypto with their credit cards has been growing globally. In Canada, the Toronto-Dominion Bank (TD), one of the largest banks in North America, announced in an email statement to customers that it is banning the purchase of cryptocurrency with credit cards. The bank said the measures were taken “in order to serve and protect our customers, as well as the bank.”

India’s HDFC Bank, the country’s largest private bank, informed clients that its debit and credit cards cannot be used to purchase cryptocurrency in order to protect customers. Restrictive measures were also supported by the largest UK bank, Lloyds Banking Group, and Virgin Money, which is present in Australia, South Africa and the UK.

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‘Smart eCard’ Stores 30 Crypto Accounts, Credit And Debit Cards In One Place

Buying a bottle of water quickly and spontaneously using cryptocurrency is still a massive challenge, but the company behind a new ecosystem says its technology will make it easy for crypto holders to use their funds for everyday purchases – all without creating a headache for merchants.

FuzeX has created a smart eCard that enables shoppers to store up to 15 cryptocurrency accounts, 10 debit or credit cards and five reward accounts in one place. Buttons integrated into the eCard allow users to decide which account they want to use to make a purchase, with the current balance for each shown on an ePaper display so they can be aware and confident of having adequate funds. The eCard’s battery life lasts for 45 to 60 days, and it is easily rechargeable.

Although furnished with industry-standard technology such as near field communication (NFC) – the tool that makes contactless payments from old-fashioned debit card readers possible – FuzeX says other security features were added to help it to stand out from traditional cards. For example, its eCard can be locked whenever a Bluetooth connection to the user’s accompanying FuzeX wallet is deactivated, and the eCard can also be wiped remotely if it is lost or stolen. Through the wallet, available as an app for iOS or Android, users can also see where their card has been used on an interactive map – as well as send, receive and exchange cryptocurrencies.

“A proven concept”

FuzeX’s technology has been tried and tested, with the company saying it has already “successfully developed, brought to market, sold and shipped more than 20,000 Fuze cards.” These smart eCards only offered payments through credit, debit or reward cards – and in 2017, the company says it managed to reach the dizzying heights of crowdfunding success, soaring to the top 0.01 percent of projects on Indiegogo after raising $2.2 mln.

The company says its proven concept and distinctive features mean there are high barriers to entry for rivals who may try to replicate its product. When compared with competitors, FuzeX says it is the only provider offering a smart eCard, with other providers supporting cryptocurrencies and nothing else. Rival cards also have to be prepaid, while FuzeX users can get payments debited directly from their account.

FuzeX says it takes pride in offering a legitimate, dependable service. Another card issuer, TenX, suffered a severe service disruption when its cryptocurrency card ceased working because its issuer Wavecrest allegedly violated Visa’s policies.

Listed on cryptocurrency exchanges

The company has now concluded its initial coin offering. For now, it says FXT tokens can be used to purchase FuzeX charges and pay for “small annual memberships” necessitated by its partnerships with issuers. Although it is possible to pay for membership using other cryptocurrencies and fiat, FuzeX offers discounts when FXT is used.

FXT tokens have now been listed on four cryptocurrency exchanges. As of May 10, they are available on the Taiwan-based Cobinhood exchange, where promotions are taking place to herald the arrival of FXT. It has also been listed on HitBTC, COSS and Livecoin.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Bank Of America CTO Calls Bitcoin ‘Troubling’, Reconfirms Credit Card Purchase Ban

Bank of America (BoA) doubled down on its decision to stop customers buying Bitcoin with its credit cards May 10. The bank’s official called cryptocurrency “troubling,” according to CNBC.

Speaking to CNBC in an edition of the network’s Squawk Box segment, BoA’s CTO Kathy Bessant said that cryptocurrencies are “designed to be not transparent” and thus hinder banks’ attempts to catch “bad guys.”

“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort, in fact [it’s] designed to be not transparent,” she told the program.

BoA caused friction with its cardholders when it instigated the Bitcoin purchasing ban in February.

The move saw JPMorgan and Citigroup follow suit, the former nonetheless subsequently finding itself at the center of a consumer lawsuit in April over “fraudulent” purchase fees.

For Bessant, however, cryptocurrencies still represent the opposite of financial transparency.

“The way we sort of quote-unquote catch bad guys is by being transparent in the financial moment of money. Cryptos is the antithesis of that,” she added.

“Just like we don’t allow stocks to be purchased on our credit cards, we’re not going to allow cryptos or other currencies to be purchased on our credit cards.”

Weeks after the initial ban, BoA produced a report conversely identifying future risks to its business, in which it highlighted its “inability to adapt” to the competition cryptocurrency poses.

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J.P. Morgan Chase Sued For Charging Crypto Buyers With Surprise Fees

J.P. Morgan Chase & Co, a leading global financial services provider and one of the largest banking institutions in the US, was sued for charging undeclared fees to customers who used their credit cards to purchase cryptocurrency, treating the purchases as cash advances, Reuters reported April 11.

The lawsuit was filed on Tuesday in a federal court in Manhattan on behalf of a proposed nationwide class, accusing the bank for charging additional fees, sky-high interest rates on the “cash advances”, and refusing to refund the charges to customers who complained.

Brady Tucker, the plaintiff, claims the bank charged him $143.30 in fees and $20.61 in interest charges for cryptocurrency transactions he made in January and February. Tucker made an attempt to dispute the charges through Chase’s customer service line, but the bank refused.

The lawsuit claims that J.P. Morgan Chase & Co violated the US Truth in Lending Act, which requires the disclosure of policy changes to customers in written form. The lawsuit asks to “recover [Tucker’s] and the Class’s actual financial damages, plus statutory damages in the aggregate amount of $1 million, plus his costs of this action and reasonable attorneys’ fees and expenses incurred therein”, according to the complaint submitted to the court.

On Feb. 3, Chase joined a wave of banks banning customers from cryptocurrency purchases with credit cards The bank later stated that financial institutions can “face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies.”

A representative of J.P. Morgan Chase & Co declined to comment on the legal claim, stating that customers can continue using their Chase debit cards to buy cryptocurrency.

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Cryptocurrency Startup To Take On ‘Outdated’ Credit Cards Through Blockchain Payment Protocol

PumaPay is building a Blockchain-based protocol to reform how everyday financial transactions are completed – with a warning that credit and debit cards are unfit for purpose in today’s “fast-paced, global economy.”

PumaPay claims its system has what it takes to propel cryptocurrencies into mainstream use and rethink how payments are processed. It is developing an open-source “PullPayment Protocol” which enables merchants to pull funds out of a customer’s account with their consent. This would replace old-fashioned methods where a shopper pushes money to a retailer, with the cash going through a long line of intermediaries in a costly process that can take days to complete.

According to PumaPay, its invention is “far more credible, efficient, cost-effective and scalable” than current solutions – and offers much-needed flexibility to make cryptocurrencies viable as a source of payment both online and offline.

Serving merchants, not exploiting them

According to PumaPay, it is merchants who lose out most through the economy’s “anachronistic” reliance on card payments which dominate online shopping sites.

The project says retailers and small businesses face multiple fees, ranging anywhere from 2 percent to 8 percent in some cases. Not only do these charges take a serious toll on a merchant’s profit margins, but PumaPay says long transaction reconciliation times have a detrimental impact on cash flow. Chargebacks are also becoming more common because of fraud and buyer’s remorse, resulting in fines and insecurity – with merchants continually uncertain over whether the money from a sale will reach their bank account.

Despite cryptocurrency and Blockchain representing an exciting development over the past decade, PumaPay argues that none of the currently available crypto-payment solutions are functional enough to compete with big players such as Visa and Mastercard.

PumaPay says it plans to “serve merchants, not exploit them” and make its platform “the de facto standard for modern payments.” It is already promoting the protocol and attracting early adopters who will begin using the system upon release – including brands such as Fashion TV, Rent24, Backpack.io, CCBill, SegPay and other online merchants and payment processors across multiple industries.

Several adult entertainment companies have also embraced the protocol – with the industry suffering from high credit card transaction costs because their sector is deemed “high risk.” PumaPay believes its protocol is well suited to pay-per-view scenarios, providing flexibility for entertainment platforms and protecting their clients’ privacy. IMLive, Vivid Entertainment and LoadedCash are among the high-traffic, high-volume brands who have joined the project as early adopters so far.

PumaPay CEO Yoav Dror told Cointelegraph: “Many online platforms are now releasing their own tokens which are by default limited by a platform’s user base. The PumaPay token transcends merchants, platforms and industries as more and more merchants express the interest in joining the ecosystem. As a result, the product offering will increase along with the PMA [token]’s spending potential and the demand for the token will grow.” The ultimate vision of the PumaPay economy is the self-feeding loop that keeps growing with new merchants and customers.

Merchants who become part of the protocol will also benefit from a hub called PumaPay Pride – an app which alerts shoppers to nearby businesses which accept the platform’s token.

“As flexible as payment cards”

According to PumaPay, the flexible nature of PullContracts means merchants can mold them in ways to best suit their business – allowing them to conduct offline transactions and receive recurring payments.

Examples of potential uses for PullContracts given in its white paper include purchasing a magazine subscription, monthly payments of electricity bills and paying for dinner at a restaurant. PumaPay also believes its system could become an ideal way to make children financially independent, with young people given their own wallets and their parents allowed to veto purchases if the item they want falls outside the parameters of what the pocket money is for. The same scenario of ‘restricted payments’ can be applied to corporate expenses with employees’ wallets provided by an employer.

PumaPay plans to initially launch an Android app for consumers, with a version for iOS and a Chrome-based application soon afterwards. It is hoped shoppers using PumaPay will see costs tumble as merchants cut prices in response to greatly reduced transaction fees.

PumaPay is holding a token generation event for seven days, beginning at midnight on April 26 2018. Depending on contribution levels, it hopes to integrate its first early adopter in the second quarter of this year – and release a simple version of its PMA token. Tests of the next-generation Blockchain, a more advanced version of its token and cryptocurrency wallets would follow towards the end of this year and into 2019.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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India’s HDFC Joins List Of Banks Banning Crypto Purchases Via Card

India’s HDFC Bank, the country’s largest private bank, has informed clients that its debit and credit cards cannot be used to purchase cryptocurrency, local news source First Post reported March 14.

In a letter to clients sent on Tuesday March 13, HDFC explained that the measure was taken in order to protect customers. The letter allegedly states:

“To ensure our customer’s security, we have decided to not permit usage of HDFC Bank credit, debit and prepaid cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies on merchants suspected to be dealing in cryptocurrency or online foreign exchange trading or both.”

The letter also mentioned that the Reserve Bank of India had repeated warnings to citizens “regarding the potential economic, operational, legal and security related risks associated in dealing with such currencies.”

The move follows last month’s Citibank India decision to ban both credit and debit cards for crypto purchases due to “security-related risks associated in dealing with bitcoins.”

The ban specifically of credit cards for crypto purchases was initiated by US giants J.P. Morgan Chase, Bank of America, and Citigroup on Feb. 3, 2018. The move was followed by the largest bank in the UK, Lloyds Banking Group, Feb. 5, and Virgin Money in Australia, South Africa, and the UK on Feb. 6. A couple of weeks ago, one of the largest Canadian banks, TD Bank joined the list.

On Monday, March 12, former Indian Gov’t Official Shaktikanta Das argued that cryptocurrencies “should not be allowed at all,” because there is no way to regulate cryptocurrency “effectively.”

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Steve Wozniak ‘Loses 7 BTC’ In Unlikely Credit Card Fraud

Apple co-founder Steve Wozniak allegedly lost seven bitcoins to fraudsters using a stolen credit card, the India Economic Times reported Monday, Feb. 26.

The tech veteran was speaking at the Global Business Summit 2018 in New Delhi when India Economic Times reported him admitting to the audience he had lost the funds – seven bitcoins to be exact – now worth about $75,000.

I had seven bitcoins stolen from me through fraud. Somebody bought them from me online through a credit card and they cancelled the credit card payment. It was that easy!” the publication quotes him as saying.

“And it was from a stolen credit card number so you can never get it back.”

Despite multiple publications subsequently picking up on the story, Wozniak has yet to confirm more information about the theft, and the unusual circumstances surrounding the loss.

The trade appeared to have closed with Wozniak sending the bitcoins before receiving the fiat funds – something p2p cryptocurrency trading platforms such as Localbitcoins firmly warn users against doing.

It remains unclear whether Localbitcoins or other major platform was used for the trade, and whether an escrow feature – that would have prevented the possibility of credit card fraud – was available.

Nonetheless, the weak link allowing the fraud to be successful appears to lie either in the susceptibility of credit card data to fraud or human error in sending bitcoins without confirmation of funds receipt.

Consumer complaints surrounding cryptocurrency “scams” have increased markedly over the past year, even involving Ethereum co-founder Vitalik Buterin, Cointelegraph reported this month, yet a lack of diligence on the consumers’ part remains palpable.