Last Week in Cryptocurrencies — Mainstream Adoption Getting Stronger
Cryptocurrencies are at an exciting stage in mainstream adoption. Regulations are catching up to innovation and are close to opening the gates of Wall Street and mainstream adoption. Central banks are in an information collecting stage before taking on high-potential, ambitious projects.
Let’s dive into the developments from last week. Each title is a link to the source.
SEC: US Crypto Exchanges Not ‘Enthusiastic’ Enough About Regulatory Compliance
Interviewed by CNBC, the SEC’s Director of Division of Trading and Markets, Bredd Redfearn, stated that they are “underwhelmed by the enthusiasm for coming within the regulatory structure right now.”
He goes on to add: “There are a number of exchanges that are trading ICOs that I would think that we would see more registrations.”
SEC chairman: Cryptocurrencies like bitcoin are not securities
In an interview with CNBC, SEC Chairman Jay Clayton sees “incredible promise” in distributed ledger technology (DLT). Clayton sees DLT driving efficiencies in the financial markets through: cryptocurrencies, explaining that cryptocurrencies can “(r)eplace the dollar, the yen, the euro with Bitcoin. That type of currency is not a security.”
ICO’s that are promising a return through the launch of their coin, that is a security, which the SEC will regulate. The SEC regulates “the offering of that security and the trading of that security.”
The chairman also made it clear that he does not support the notion that they will be changing the definition of securities to fit cryptocurrencies.
Crypto Unicorn Circle Aims to Expand Into Regulated Banking
Backed by Goldman Sachs Group Inc., Circle Internet Financial Ltd. is venturing where no other cryptocurrency company has gone: seeking a federal banking license.
Circle also looks to pursue broker-dealer and trading venue registration with the SEC.
This banking license will allow Circle to connect their customers and services to other aspects of the financial system. Having direct access to the federal reserves will allow Circle’s customers to access their services with U.S. dollars and digital coins.
Coinbase “On Track” To Operate as a Regulated Securities Firm
Coinbase is in the process of getting approved by federal authorities to operate a regulated broker-dealer. This step is made possible with their acquisition of a broker-dealer (B-D) license, alternative trading system (ATS) license, and a registered investment advisor (RIA) license.
Former SEC Chairman Represents Ripple In Lawsuit for Alleged Sale of Unregistered Securities
Former SEC Chairman Mary Jo White represents Ripple in lawsuit filed by investor Ryan Coffey.
This class-action lawsuit alleges that Ripple violated securities laws.
South Africa Central Bank Success in Blockchain Payment System
South African Reserve Bank (SARB) claims success in “simulating distributed ledger technology-based wholesale payment system.”
Their payment system processed a typical daily volume of transactions within two hours. The transactions were all processed within two seconds.
Denmark to be First Country Implement Blockchain Technology Through Registering Ships
Press release from Denmark explains they’ve signed an agreement to create a partnership with 22 other European countries to form a common blockchain infrastructure.
Denmark plans to be the first country in the world to implement blockchain technology by registering ships into national registry.
Money 20/20 Conference: Central Banks Watching the Development of Cryptocurrencies and Blockchain
Highlights from the Money 20/20 conference in Amsterdam included statements from central banks.
Bank of England
The Head of Division of the Bank of England explained:
“We recognize that in distributed system there is the potential for resilience and other benefits of distributed payment systems is one that we want to make sure we are aware of and that is fully integrated to the work we are currently doing to our own infrastructure.”
Bank of Lithuania
Dr Marius Jurgilas, a board member of the Bank of Lithuania, had three main takeaway points from the discussion:
“The product we (banks) are selling is trust. If our product is good, there would be no need to talk about cryptocurrencies. It’s a matter of trust, if we trust the institution mandated and entrusted to keep oversight of our payment systems, ensure that money is not affected by excessive inflation then there is no need for payment instruments or other means of storing value.”
Takeaways include the following:
- Banks sell trust. They must deliver on their product by keeping oversight of their payment systems and ensuring “that money is not affected by excessive inflation.”
- If the public thinks that the product that the banks are selling could be better, then they’ll turn to other products that deliver on this, like cryptocurrencies.
- Jurgilas and his colleagues say they realize the opportunity for ICO’s to “provide funding opportunities for really risky business activities.” As regulators, they could create a more efficient funding mechanism by creating a regulatory framework to sort ICO’s so that investors aren’t just funding PR campaigns.
Swiss National Bank
With the Swiss government potentially ending fractional reserve banking in the country, this spells out two options for the Swiss National Bank to employ.
“There would be various ways to implement that. One way would be for the central bank to issue a central bank digital currency, another option is to open up Central Bank bank accounts for everyone directly there.”
Crypto Valley’s Zug to Run Switzerland’s First Blockchain-Based Municipal Vote
Crypto Valley, Zug, set to conduct trial municipal vote this summer. The votes will be non-binding as it is a test. After voting, the participants will be surveyed about whether they think blockchain-based ID system should be used for a wide variety of use-cases, ranging from paying fees to renting out books.
That’s it for last week’s highlights. As usual, follow us at EverbloomHQ on Twitter or join our Telegram group.
About the Author
Eric Nemeth (LinkedIn): Business Development Associate at Everbloom | Studied Economics at Boston College | Interested in tokenizing real assets | International traveler | Futbol loving Chelsea fan.
