The government of Switzerland wants to accommodate the blockchain sector within its existing financial laws.

The country’s Federal Council issued a report on Friday, providing a legal framework for distributed ledger technology (DLT), or blockchain,, stating that Switzerland’s existing rules are well suited to dealing with such new technologies, but there is still a need for some amendments.

Firstly, the council has proposed an amendment to the country’s securities law to increase the legal certainty of crypto tokens. “Since an entry in a decentralised register accessible to interested parties can create publicity similar to the ownership of a security, it seems justified to attach similar legal effects to this entry,” the highest executive authority of the Swiss Confederation explained.

The council also wants to segregate crypto assets from the insolvent debtors’ total estate in bankruptcy proceedings. However, because under the country’s existing Debt Enforcement and Bankruptcy Act (DEBA) it is not clear whether these assets can be segregated, the council said there is a “great need for legal certainty” for the parties involved and thus a corresponding change is proposed in the DEBA act.

Further, the government body has proposed the creation of a new “authorization category” for infrastructure providers in the blockchain sector, and will make amendments to its Financial Market Infrastructure Act accordingly. Currently, the council has not yet proposed any specific changes, as the central definitions of the terms “securities” and “derivatives” in financial market regulations are also relevant for blockchain-based business models, it said.

Regarding the country’s Anti-Money Laundering Act, the council said the legislation is currently adequate enough to also cover activities related to cryptocurrencies and initial coin offerings (ICOs). “The general principles of the Anti-Money Laundering Act also apply to crypto-based assets.” it said, adding that there is no need for a “fundamental revision” at present.

The Swiss government has been working on blockchain regulations since 2016, when the country’s Federal Department of Finance outlined its plans to regulate fintech. Later in early 2017, the council itself was seeking consultations on regulatory changes for the domestic financial industry to account for fintech including blockchain.

Most recently, Switzerland’s Financial Market Supervisory Authority (FINMA) introduced a new fintech license with “relaxed” requirements that is applicable to blockchain and cryptocurrency-based firms.

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Fintech is believed to be a “systemic risk” to the broader economy, according to a survey conducted by the United States Depository Trust and Clearing Corporation (DTCC), Dec. 11.

20 percent of respondents to the so-called “DTCC Systemic Risk Barometer,” identified fintech among the system risks for the global economy in 2019. The results are up from 15 percent in last year’s survey.

Stephen Scharf, DTCC’s Managing Director and Chief Security Officer, declared that the increased concern over fintech “demonstrates a growing awareness of the potential risk and highlights the need to evaluate both risks and rewards associated with fintech initiatives.” He then explained:

“As the industry continues to adopt fintech innovations, like blockchain, AI and cloud solutions, we must ensure that those innovations do not jeopardize the safety and security of the current global financial marketplace.”

Figures in traditional finance have often proven wary of cryptocurrency and the technology behind it, blockchain. As Cointelegraph reported mid-November, an Executive of the European Central Bank (ECB) defined Bitcoin the “evil spawn of the [2008] financial crisis.”

This month Andreas Utermann, the CEO of major investment management firm Allianz, declared that crypto assets should be “outlawed” during a panel in London. On the same panel, Andrew Bailey, the head of United Kingdom’s Financial Conduct Authority (FCA) argued that crypto assets lack “intrinsic value.”

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The United Arab Emirates’ (UAE) central bank is collaborating with the Saudi Arabian Monetary Authority (SAMA) to issue a cryptocurrency accepted in cross-border transactions between the two countries. English-language Dubai-based media outlet GulfNews reported on this collaboration on Dec. 12.

Mubarak Rashed Al Mansouri, the governor of the UAE’s central bank, said during a meeting on the global banking standards and regulation for the Arab region that:

“This is probably the first time ever that witnesses the cooperation of monetary authorities from different countries on this topic and we hope that this achievement will foster similar collaboration in our region.”

Still, Al Mansouri also pointed out that this “is just a study” and that they “have not gone deeper into it.” The digital currency under development is supposed to be used only between banks. According to Al Mansouri, this would be ”much more efficient.”

Al Mansouri added that the recent development in financial technology brings both challenges and opportunities. The key, according to him, are regulators that better understand the risks and the best ways to mitigate them.

As Cointelegraph reported at the beginning of October, a digital currency backed by the Dubai government will get its own payment system. Consequently, local consumers will be able to use the digital currency to pay for goods and services.

The Abu Dhabi Global Market also recently conducted a test of a blockchain-based Know Your Customer (KYC) system. The first phase of the pilot held in the international free zone in the capital of the United Arab Emirates has reportedly been successful.

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Bill Gates seems to have a positive view of the future of virtual currencies. Mr. Gates has already shown support for virtual currencies in the past. Now, he said that this technology can empower the world’s poorest. The information was released a few days ago by Bill Gates on YouTube.

Bill Gates Positive About the Future of Cryptocurrencies

Back in 2014, the founder of Microsoft commented to Bloomberg that Bitcoin works in a better way than other currencies. He stated that it was better for large transactions and because Bitcoin is more convenient because it is not necessary to be physically in the same place.

Talking about the financial world and system, he said that cryptocurrencies could help those unbanked. He mentioned that the world poorest people do not have financial tools and access as other individuals. This is something that does not help them go out from poverty and vulnerable situations.

He has also said that the digitalization of money and financial systems can help those that live in poverty. Additionally, it might be possible to develop different other areas such as health and agriculture.

Abraham Cambridge, the CEO and founder of Sun Exchange, commented about it:

“Together, we are working towards a world where no one is forced to cook with unsafe kerosene or wood-burning stoves, no child has to worry about how they will study after dark, and lack of access ceases to propel cycles of poverty.”

Using virtual currencies it might be possible to reduce around 90% of the costs of a single transaction. Each Bitcoin transaction can cost just a few cents, and other networks have even smaller fees. About the future, he says that there are two priorities. The first one is that it is necessary to drive policy changes to make sure the poor can get engaged at this level.

The second thing he says that we need is a measurement system that is able to track the progress towards drawing people. He went on saying that this does not mean to have accounts but also benefit from financial activities.

In Venezuela, citizens are using virtual currencies in order to survive the hard crisis that is affecting the country. With these digital assets, users are able to store value and avoid losing their salaries with hyperinflation.

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A group of researchers and university professors have teamed up to resolve one of the most painstaking issues preventing Bitcoin’s underlying technology to emerge a handy, real-world ledger: scalability. The team, which includes a Turing award winner, is off to a good start already after scoring $35 million in funding from a number of investors.

Full-fledged Launch Expected in Q3 2019

Announced on December 3, 2018, the group has united under the umbrella of a non-profit called Conflux Foundation. Registered in Singapore, Conflux has already gained traction in the investors-community with heavyweights like Baidu Ventures, crypto exchange Huobi, crypto mining firm F2Pool, and the Chinese arm of Sequoia Capital, chipping in to turn the project into a success.

Conflux has stated that it is going to utilize the newly raised fund in raising a ten-person development team and take things forward from there. Their roadmap includes the launch of a testing environment in February 2019, which is to be followed by the official release of a new public blockchain sometime during Q3 2019.

So how does Conflux plan on resolving Bitcoin’s speed issue?

For starters, the limitation of Bitcoin’s underlying ledger is that it can add only one block at a time to the chain. While blockchain developers have done their bit to get around this issue with innovative tweaks, there is no foolproof permanent solution to this issue. Adding multiple blocks simultaneously to the blockchain could cause it to fork, creating two different chains.

Conflux claims to have a solution to this problem. According to the nonprofit, its researchers have figured a way which could allow one to work on blocks simultaneously and add them to the chain in one action. While details are still sketchy, the research team is convinced that not only does this method prevent a hard fork, but it also doesn’t lead to any compromise to the decentralized method of consensus (hence it’s impossible for any single party to assume full control over the blockchain).

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No Need for an ICO

Conflux has made it clear that it intends to remain a nonprofit foundation. The investors backing the project have stakes in the firm in addition to access to a digital token whose value could appreciate in the future.

As for the long-term objective of the new initiative, Fan Long, of the project’s cofounders, said that the ultimate goal is to develop a scalable public blockchain that serves as a reliable platform for smart contracts and can deliver decentralized applications.

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Switzerland’s financial watchdog, the Swiss Financial Market Supervisory Authority (FINMA), unveiled a new set of guidelines on December 3, 2018, to propel the development of the local blockchain and cryptocurrency industry. Notably, local crypto startups will now be able to handle deposits of up to $100 million.

Details of the New Guidelines

The newly disclosed guidelines by FINMA specify strict rules and regulations which must be adhered to in order to obtain the coveted “FinTech” license. Having the permit would allow businesses to manage public deposits of up to CHF 100 million ($100,455,000), assuming the amount is not re-invested, and no interest is paid at any time.

Available in German, French, and English languages, the document mandates cryptocurrency businesses to submit a plethora of official documents to the financial authority along with their registration application.

Some of the details to be provided include reasons for applying for a license, description of the proposed business activity, organization structure (along with the geographical scope and target client class), and complete information about the business premises, infrastructure, and personnel, among other things.

With regard to the financial details of the entity, detailed information must be provided about the share capital structure. Further, details of participants with a direct or indirect holding more than five percent must also be disclosed.

Additionally, FINMA requires complete accountability of all board members of the business-to-be, including their addresses, educational details, CVs, and past criminal records, if any.

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The new development by FINMA is seen as a significant step forward for the Swiss cryptospace which has attracted businesses from all over the world, courtesy of its tax haven tag.

Switzerland Leads the Global Crypto Marathon

Switzerland has been at the forefront of developments in the blockchain and cryptocurrency space. Earlier in September 2018, the Swiss Bankers Association (SBA) introduced simplified guidelines after seeing cryptocurrency companies’ lack of access to the banking sector.

On a more recent note, BTCManager reported on November 19, 2018, how Switzerland gave the go-ahead to cryptocurrency startup Amun AG’s exchange traded product (ETP) to be traded on Europe’s fourth-largest stock exchange, SIX Swiss Exchange.

The decision is seen as a massive impetus for the cryptocurrency industry, especially at a time when its total market capitalization has dropped by more than 30 percent in a month.

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South Korea‘s Finance Ministry is considering taxation on cryptocurrencies and Initial Coin Offerings (ICOs), daily English-language newspaper The Korea Times reports Monday, Dec. 3.

Hong Nam-ki, South Korea’s new Minister of Economy and Finance as well as new Deputy Prime Minister, revealed that а crypto taxation plan will be finalized according to global taxation trends in the industry.

Pointing to the current ICO ban in South Korea, the deputy prime minister stated that the authorities will also form a new stance to the crypto industry, based on careful consideration of “market conditions, international trends and investor protection issues.” In his written answer submitted to the National Assembly for his confirmation hearing planned for Tuesday, Dec. 4, Hong continued:

“We will determine our policy orientations on ICOs with relevant agencies after reviewing the results of the financial regulator’s market survey and getting feedback from experts.”

The minister revealed that South Korea’s government is planning to set up a task force formed from relevant state agencies, such as the National Tax Service, in order to examine foreign cases of taxing crypto as well as the ICO industry.

In the statement, Hong wrote that cryptocurrencies are “electronics signs of values issued privately,” as compared to assets issued by central banks or other financial institutions.

The minister has urged for crypto regulation that would be developed and agreed upon internationally, noting that there are around 2,000 cryptocurrencies traded worldwide, with 160 of coins operating in the domestic market. At the same time, Hong stressed that the authorities “need to be careful” in setting up a due regulatory framework.

As well, the deputy minister claimed that authorities “will do [their] utmost to nurture” blockchain technology, stressing that 90 percent of blockchain-related businesses, except crypto exchanges, can be considered as venture companies, citing Statistics Korea.

In October, Cointelegraph reported on South Korea’s government allegedly planning to announce its official stance towards ICOs in November, as revealed by South Korea’s then-“top official,” Hong Nam-ki.

After banning ICO sales back in September 2017, South Korea’s government began to consider legalizing the sphere in August 2018, which went in line with the country’s plans to build its own “blockchain island” in the Jeju Island Resort. In October, a member of South Korea’s National Assembly Min Byung-doo called on the state to “open up the road” to ICOs, urging that “prohibition is not the only way.”

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Venture capitalist Tim Draper isn’t letting the latest Bitcoin crash get the best of him. He’s still betting on the digital currency and says it will lead the future of finance.


Crypto Will Dominate Because It’s Cheap

At the World Crypto Con in Las Vegas earlier this month, Draper reaffirmed his position that Bitcoin will reach $250,000 by the year 2022. Furthermore, he believes the entire economy will eventually pivot to digital currencies, and trusts Bitcoin to lead the way.

Discussing the benefits of digital currencies, he mentions:

They’re frictionless, they cost you less. I mean, just by that alone, it’s going to be better for people, and so they’re going to move to crypto, and they’re going to go away from the political currency. They call it fiat.

Conquering the Monetary Industry

Draper believes that eventually, cryptocurrencies will account for at least half of the world’s currency value:

That’s the way it’s going to move, and so the countries that are forward thinking are saying, ‘This is the way it’s going to be,’ so we’re going to make a huge mistake by trying to cling to our old currency, and that’s why you’re seeing the smaller countries all say, ‘Yeah, we want bitcoin, we want initial coin offerings (ICOs) here, we want the blockchain. We want all these things in our country.’

According to Draper, there is approximately $86 trillion in fiat currency all around the world which is respectively tied to certain countries’ fortunes. At press time, cryptocurrency only accounts for about $150 billion of the world’s total money supply.

Simplicity Is the Goal

However, he’s confident the ratio will eventually switch to a 50-50 balance, in which both fiat and crypto share equal positions in the global financial market. Explaining once again that cryptocurrencies are both frictionless and cheaper to operate, he states:

It will be easier to spend and invest your bitcoin than it is to spend and invest your dollars. I tend to move my dollars into bitcoin because I think, well, why would I want this currency that’s tied to some political force when I have a currency that is going to be frictionless and global? I would much rather have a global currency than one that is sort of tied to a political force.

Everybody’s Welcome in the World of Bitcoin

In the meantime, Draper says he also has plans to open a Bitcoin venture fund:

Eventually, I want to be able to raise a fund that is all bitcoin, invest it all in bitcoin into a bunch of different companies and have them pay their employees and suppliers in bitcoin, and then no accounting fees, and it’s done automatically, and it’s all built into smart contracts so that if one of those companies gets sold, I push a button and it just shoots into all their bitcoin wallets.

Like Draper, do you believe Bitcoin still has a chance? Why or why not? Let us know in the comments below.

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