Russian Financial Watchdog Calls for Global Crypto Exchange Regulations

Russia’s Financial Monitor Service (FMS) is seeking the intervention of a global financial watchdog to regulate cryptocurrencies, local media sources have reported.

Russia Wants Global Crypto Regulations

The Russian financial regulatory agency contacted the Financial Action Task Force (FATF) to request an intergovernmental initiative that could control the supply and flow of cryptocurrencies. Pavel Livadny, the Deputy Director of FMS, confirmed that they are endeavoring to secure the participation of all the FATF member countries to design a unified legal parameter for the thriving industry, citing money laundering as the primary concern.

Decentralized assets like bitcoin can be purchased, sold or exchanged semi-anonymously without a central authority’s approval. A  global crackdown against malicious underground revealed its use in some widespread crimes, including drugs trafficking, money laundering and — in limited cases — terrorism financing. The cases alerted agencies across the world, leading them to develop tentative legal provisions to regulate the crypto industry.

FATF, a global financial regulatory body, in June announced that it would build global-binding policies for cryptocurrency exchanges. Russia is among those 36 FATF members that are building regulatory frameworks for their local crypto industries, with some in the crypto community criticizing their efforts as nothing but knee-jerk reactions to the sudden bitcoin boom.

A boundary-free technology such as bitcoin cannot be tamed unless the governments willing to oversee the regulations do not come together, the FMS believes. Adding to what FATF regulation is already building, the Russian agency offered its opinion on how cryptos can be legalized, regulated and defined in the future. Translated excerpts from Livadny’s statement to the local media read:

“All FATF members must change the legislation to include new crypto ecosystems. They should introduce registration and license parameters for the companies developing in the space, which include exchanges, initial coin offering projects, and cryptographic administrators. FATF should also monitor the companies’ activities and standards for anti-money laundering.”

“If FATF regulations allow, a cryptocurrency can be digitally handled and transferred in the case of payments and investments.” the deputy added. “But, at the same time, it should not be made into securities, mainstream and virtual money, coins or other financial assets.”

$9,000 Cap on Crypto Flow

Livadny also revealed that FMS would likely impose a restriction of over $9,000 on crypto transactions. That would include every transaction made outside and inside the Russian Federation. The provision, however, stands unconfirmed unless it makes into the final regulatory draft on cryptocurrency assets.

If it comes into effect anyway, authorities would likely find it difficult to enforce, considering the pseudonymous nature of crypto-transactions, though it would be possible with the help of blockchain tracing firms, many of whom have inked government contracts elsewhere. The emergence of privacy-conscious coins like monero has already made it more difficult for agencies to identify participants in a crypto transaction.

Meanwhile, FMS is also building a crypto transaction monitoring tool to address these challenges.

BCH and EOS Extend Losses to 5% as Bitcoin Price Drops to $6,250

Over the past 24 hours, Bitcoin has lost 2 percent of its price against the US dollar, dipping below the $6,300 mark to $6,250.

While cryptocurrency-only exchanges are demonstrating a price of $6,350 for Bitcoin due to the premium on BTC-to-USDT (Tether) pair, the actual price of Bitcoin remains at around $6,256.

The volume of BTC has increased from $3.1 billion to $4.2 billion over the past seven days, by more than 35 percent. But, most of the volume recorded by major cryptocurrency exchanges represent sell orders.

Major Digital Assets and Tokens Take a Hit

As the price of Bitcoin fell below the $6,300 mark for the first time since October 15, the value of major digital assets including Bitcoin Cash (BCH) and EOS fell by more than 5 percent along with small market cap tokens.

Several cryptocurrency traders and technical analysts stated that the abrupt dip in the price of BTC was still a minor movement above major support levels and as such, it is still too early to confirm a bearish short-term trend.

“BTC dipped into a demand area. Absolutely nothing to worry about right now. Still focused on alts and using this opportunity to buy the dip,” AwaitingMonk said.

Andy Chung, the head of operations at OKEx, the third largest cryptocurrency exchange in the global market, emphasized that historically, Bitcoin has tended to dip in value and show a noticeable drop in volume prior to a large short-term rally.

In the weeks to come, before the end of 2018, Chung stated that the stability of BTC for nearly a year could lead to a positive movement on the upside.

“It’s always quiet before a good storm. The market has been calm for almost a year, we can expect something good to happen soon to Bitcoin.”

In September, the volume of Ripple was around $1.8 billion. Since then, the daily trading volume of Ripple has fallen to around $300 million, while the volume of BCH fell below the $300 million mark.

In comparison to the volume of Ethereum (ETH) at around $1.5 billion, trading activity of XRP and BCH investors remain significantly low relative to other major digital assets.

In the short-term, due to the lack of volume, BCH and XRP are more vulnerable to sell-pressure and a dip below important support levels than Bitcoin and Ethereum.

Can Bitcoin Speedily Recover?

Previously, analysts stated that if Bitcoin dips before the end of October, a speedy recovery will be possible as long as BTC does not fall below the $6,000 support level. If BTC can sustain its volume above the $6,200 region, then a short-term corrective rally will be possible.

But, if BTC falls to the low $6,000 region affected by the poor performance of major cryptocurrencies and other tokens, then a further drop to the $6,000 to $6,100 can be expected.

Singapore’s National Energy Provider Launches Blockchain Marketplace for Green Energy

Singapore’s national electricity and gas provider has launched blockchain-powered trading of renewable energy certificates in a new marketplace.

The blockchain is designed and built in-house by the company’s own team of digital energy experts to “ensure the security, integrity and traceability” of every renewable energy certificate (REC) transaction, Singapore Power (SP) said in a press release.

The SP Group, a unified corporate entity of former electricity and gas departments of Singapore’s Public Utilities Board, claims the blockchain marketplace will enable local and international companies meet their energy sustainability targets.

When companies purchase RECs, they are directly sold electricity from renewable sources from companies producing green energy. The marketplace, SP adds, will ‘automatically’ match buyers with sellers around the globe based on requirements and preferences.

Launched on Monday at the ASEAN Energy Business Forum, the blockchain enabled local companies City Developments Limited (CDL), a powerhouse in Singapore’s property sector and lending giant DBS Bank as the first buyers of the certificates.

“Given that buildings consume 40% of energy globally, increasing the use of solar energy and neutralising our operations’ carbon footprint has been a priority in the way we build and manage our projects,” CDL sustainability chief Esther An said.

She added:

“We are glad to support the innovative and timely initiative by SP Group to embrace blockchain technology as a platform to accelerate Singapore’s transition to a low-carbon economy.”

Notable sellers include solar energy producers Cleantech Solar Asia, with over 120 solar sites across Asia, and LYS Energy Solutions with their wares for sale on the marketplace.

Katoen Natie Singapore, a chemical logistics company set to launch a 6.8 MWh solar power facility – the largest single rooftop solar facility at a warehouse domestically – is also positioning itself as a seller of renewable energy on the blockchain platform.

The launch of the blockchain-powered trading marketplace follows SP’s marked foray to ‘transform’ the energy sector with commercial blockchain solutions. In May 2017, the energy supplier announced a collaboration with other global energy giants with the launch of a consortium to develop decentralized solutions.

Australian Crypto Startup Invites Steve Wozniak to ‘Digital Currency [Holiday] Town’

An Australian travel tech startup has invited Apple co-founder Steve Wozniak to Agnes Water and Town of 1770, the country’s first digital currency towns.

Brisbane-based TravelbyBit extended the invitation after the American inventor expressed his interests to travel the world using nothing but bitcoin, as reported by local publication Micky. The company, which enables businesses to accept bitcoin and helps travelers explore the world on cryptos, recommended Wozniak to use their portal to book flights to the beach towns in Australia’s Central Queensland region.

In a broader context, the tweet helped people understand the cultivating ecosystem of cryptocurrencies. Wozniak’s willingness to travel on cryptos reflect the demand of a majority of the crypto holders, i.e., to use bitcoin to make purchases in real-time. At the same time, TravelbyBit’s inclination to meet the demand by enabling merchants to accept cryptos completes the circle of one of the Bitcoin’s primary use cases.

On top of all, the tweet allows people to see the willingness of merchants and consumers to switch to alternative payment mechanisms that are cheaper and more hassle-free than their traditional counterparts. Agnes Water and Town of 1770 is a prime example displaying how users are open to the ideas of decentralized payment networks like Bitcoin. The towns have more than 30 businesses that accept bitcoin as one of the payment methods.

Traveling with Cryptos

If one looks at a case study of an average tourist traveling from, say, New York to Queensland, he will be required to either get an expensive traveling card, that would rip off 3-5 percent commission off every transaction, or exchange his/her US Dollars to Australian Dollars via over-the-counter exchanges. The latter would also charge high commissions for a task as mere as converting the fiat.

Bitcoin certainly solves this issue by becoming a global token that reduces intermediaries from the conversion process. One can carry it anywhere in a digital format, pay merchants by paying a nominal transaction fee charged by the network and exchange it for other fiat currencies at comparatively cheaper rates than OTC cash exchanges.

TravelbyBit CEO Caleb Yeoh said that traveling with Bitcoin is no less than moving with one global currency.

“If you travel the world you have to deal with multiple currencies, the exchange rate can be confusing, sometimes you struggle to find ATMs, and sometimes you get swindled by money changers,” he explained.

What’s more, Brisbane International Airport also began accepting cryptocurrencies across terminals in a world-first at merchant locations via point-of-sale systems developed by TravelbyBit.

Wozniak, should he accept the invitation, could accelerate a gradually-moving crypto revolution in his own way.

Cryptocurrency Derivatives in the UK at Risk of Ban, Taskforce to Have Final Say

Cryptocurrency derivatives including futures, options and contracts for differences could potentially be prohibited in the United Kingdom in the near future.

According to a statement issued by the Financial Conduct Authority (FCA), UK’s financial watchdog, consultations will be held between now and the first quarter of next year where a ban on crypto derivatives will be explored.

“A separate consultation by Q1 2019 on a potential prohibition of the sale to retail consumers of derivatives (including contracts for differences, options, and futures) referencing certain types of cryptoassets…” read the press release.

The consultations will be led by the UK Cryptoasset Taskforce which is comprised of representatives drawn from various government bodies and agencies including the Bank of England, Her Majesty’s Treasury (HMT) and the FCA.

The Good, the Bad and the Ugly…

In light of the fact that crypto assets possess both risks and benefits to consumers, businesses and the markets, the FCA also outlined a couple of actions that will be undertaken after deliberations by the Cryptoasset Taskforce. By the close of this year, for instance, the Cryptoasset Taskforce has committed to holding consultations with a view of offering guidance on the cryptoassets that fall within the limits of the current regulations as well as those that don’t.

The Cryptoasset Taskforce has also committed to holding deliberations in order to determine whether the existing regulations should be expanded in order to include the cryptoassets that currently outside the regulatory perimeter but which have similar features to other specified investments.

And in order to determine whether there is a need for effectively regulating exchange tokens, cryptocurrency exchanges and wallet providers, and if so how to approach such an effort, the taskforce will also hold consultations early next year.

Comprehensive AML Measures

The Cryptoasset Taskforce has also committed to implementing a comprehensive response to the use of cryptocurrencies in illicit activities by building on the Anti-Money Laundering Directive of the European Union. The UK cryptocurrency taskforce is now more than seven months old having been unveiled earlier in the year as CCN reported.

The actions the Cryptoasset Taskforce has committed to pursuing come at a time when there have been growing calls in the United Kingdom pressing for cryptocurrency regulations. In September, for instance, British lawmakers branded the country’s cryptocurrency markets the ‘Wild West’ as investors were inadequately protected as they demanded remedial measures.

“Bitcoin and other crypto-assets exist in the Wild West industry of crypto-assets. This unregulated industry leaves investors facing numerous risks,” the chairperson of the Treasury Committee in the UK parliament, Nicky Morgan, said at the time.

Untraceable Cryptocurrency Can Help Us Bypass Sanctions: Iranian General

An Iranian general has strongly hinted that the country could soon turn to cryptocurrencies as a way to evade international financial sanctions.

Brigadier General Gholam Reza Jalali, head of Iran’s Civil Defense Organization, on Monday spoke about the ‘great opportunities’ presented by cryptocurrencies in the latest indication that Tehran is developing a state cryptocurrency.

As reported by the Mehr news agency, Jalali was speaking to the state-owned TV station Channel 2 news on Monday when he stated:

“Cryptocurrencies can help bypass certain sanctions through untraceable banking operations.”

In doing so, Iran expects to reduce its dependence on U.S. dollar-based payment rails operated by SWIFT for global commerce. U.S. President Donald Trump announced sanctions against Tehran earlier this year, sending the Iranian Rial to historic lows.

“Our major problem here is the US dollar, because the United States uses its national currency to control any country’s SWIFT operations, so we should reduce dependence on the dollar and replace it with another currency,” the senior Iranian official added.

Iran has previously suffered a banking blackout from SWIFT in a four-year hiatus between 2012-2016.

Iran and Russia Consider Using Cryptocurrency for Trade

As reported in May, following Trump’s formal withdrawal from the Obama-era nuclear deal with Iran, both Iran and Russia have held discussions over cooperating to use cryptocurrency in bilateral trade.

“They share our opinion,” Iran’s Parlimentary Commission of Economic Affairs chief Mohammad Reza Pourebrahimi revealed after a meeting with the Russian Paliament’s Committee on Economic Policy.

“We said that if we manage to promote this work, then we will be the first countries that use cryptocurrency in the exchange of goods,” the official said at the time.

Iran’s agenda to develop its national cryptocurrency was first revealed by the country’s Information and Communications Technology (ICT) minister Mohammad-Javaz Azari publicly in February this year. Come May, the minister confirmed an experimental model of the cryptocurrency project was ready.

Open Source Technology

Iran’s Informatics Services Corporation (ISC) a central bank-affiliated body, revealed has notably revealed that the cryptocurrency is backed by the fiat currency Rial and is developed using open-source Hyperledger Fabric technology, the blockchain framework initially developed by IBM and New York-based industry startup Digital Asset. The Hyperledger Fabric is now code hosted by the Linux Foundation, which also leads the Hyperledger blockchain consortium.

The ISC has also revealed a roadmap for the cryptocurrency wherein the digital rial token is to be used as an interbank payment instrument in the first phase of its release before it integrates into society as a local payment medium in Phase Two.

Yellen: Bitcoin Not a Store of Value, ‘Anything But’ a Useful Currency

Janet Yellen, the former chair of the Federal Reserve, has doubled down on her longstanding criticisms of bitcoin and other cryptocurrency assets.

Speaking on Monday at the 2018 Canada FinTech Forum in Montreal, the Obama appointee, who led the Fed from 2014 to 2018 following a four-year tenure as vice chair, alleged that bitcoin’s decentralized nature inhibited its utility as a payment instrument.

She said:

“It has long been thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. It’s not used for a lot of transactions, it’s not a stable source of value, and it’s not an efficient means of processing payments. It’s very slow in handling payments. It has difficulty because of its very decentralized nature.”

Of course, supporters would argue that cryptocurrency is still an early-stage technology, comparable to the internet in the early 1990s in that it has shown promise while also suffering from growing pains and a sub-optimal user experience.

Despite a fairly steep dropoff during early 2018, the average number of bitcoin transactions per block has steadily increased throughout the network’s history, from just 1 in 2010 to more than 1,800 today. Developers also predict that second-layer technologies such as the Lightning Network (LN) should allow the network to scale its transaction capacity exponentially while also making BTC useful for everyday payments and microtransactions.

Though perhaps not useful for the proverbial “cup of coffee” today, bitcoin is regularly used to move hundreds of millions of dollars across borders, often much more quickly and cheaply than settling such transactions through the conventional financial system. Earlier this month, for instance, a crypto user sent $194 million worth of bitcoin for just $0.10.

To Yellen’s other point, bitcoin, as the face of an entirely new asset class, is indeed volatile, though it has grown more stable in recent months, bolstered by the launch of cryptocurrency derivatives and other tools that aid in price discovery.

Nevertheless, Yellen’s bearish outlook on bitcoin is largely in line with criticisms she has made in the past. Last December, days before the bitcoin price crested near an all-time high near $20,000, she lambasted bitcoin as a “highly speculative asset” with a “very small role” in the financial system.

She said:

“I would simply say that Bitcoin at this time plays a very small role in the payments system. It is not a stable store of value and it doesn’t constitute legal tender. It is a highly speculative asset.”

Her successor, Trump appointee Jerome Powell, has struck a similar tone, warning lawmakers earlier this year that cryptocurrency is a risky investment class that is dangerous for “unsophisticated” retail investors. He also said that bitcoin and its peers should not be considered real currencies since they have no intrinsic value.