An arm of Tokyo-listed internet group Digital Garage is working with bitcoin infrastructure startup Blockstream to test the issuance of a Japanese yen-pegged stablecoin.

Crypto Garage, a Digital Garage subsidiary focusing on blockchain and crypto tech, announced Monday that it has launched a new platform dubbed SettleNet that would allow app development on Blockstream’s inter-exchange settlement network Liquid, including the issuance of stablecoins.

The initiative, slated to last for a year, is one of the first proof-of-concept trials authorized under a regulatory sandbox program managed by the Japanese government, Crypto Garage said.

The project aims to let participating members – specifically, crypto exchanges licensed in Japan at this stage – test the SettleNet platform to issue the stablecoin and to provide a settlement service between the stablecoin and crypto assets. Blockstream also participated in building the platform.

Crypto Garage said the JPY-pegged stablecoin would trade against Blockstream’s bitcoin-pegged token, Liquid Bitcoin (L-BTC), over its Liquid network. Liquid is a bitcoin sidechain project that went live in October. For the trial, transactions will be conducted in limited volume.

Atomic swaps will enable the tokens to be swapped “simultaneously,” said Crypto Garage.

The firm continued:

“This will enable rapid, secure and confidential transfer of the crypto assets while eradicating counterparty risk. In addition, SettleNet will provide the regulatory authorities with the functionality to monitor any unlawful trade, including money laundering.”

Digital Garage initially collaborated with Blockstream in November 2017 with an aim of fostering blockchain development in Japan. Blockstream CEO Adam Back had said at the time: “The Japanese market is ready for new business models that blockchain technologies can enable.”

Back in October, Japanese IT giant GMO Internet also announced the plans to issue a yen-pegged stablecoin called GMO Japanese Yen (GJY). The firm said at the time that GJY will be issued to Asian markets in the fiscal year of 2019 via, its crypto exchange subsidiary.

This post credited to Coindesk. Yen and bitcoin image via Shutterstock 

It goes without saying that 2018’s bear season savaged the broader crypto industry. Investors lost faith, Wall Street seemingly pulled out, and entire startups collapsed as financial pressure mounted, catalyzed by a collapse of the Bitcoin price. Yet, ambitious venture groups continue to seek financiers en-masse, as arguably, bear markets are an optimal time for “buying the dip.”

Pro-Bitcoin 1confirmation Seeking $60M For New Crypto Fund

On Thursday, the Wall Street Journal’s “Venture Capital” column revealed that San Francisco-headquartered 1confirmation, supposedly one of the first crypto-dedicated venture groups, is looking for prospective investors. Citing a person familiar with the matter, the WSJ noted that 1confirmation is looking for $60 million for its second fund — more than double the $27 million raised in the American firm’s inaugural round in December 2017.

With this newfangled $60 million fund, 1confirmation, which has holdings in recently-launched Veil, Coinbase, Bitcoin, Ethereum, among other vehicles, plans to back infantile crypto projects by purchasing equity or tokens.

Although 1confirmation seemingly has high hopes for its fund, as its first venture secured funding from Mark Cuban, Marc Andreessen, and Thiel Capital, 2018’s downturn likely killed faith in this nascent sector. Maybe 1confirmation can tap Cuban and crew again, but such ambitions may be too zealous.

However, there’s a likelihood that 1confirmation performed better than cynics may be thinking. Save for the American fund’s investment in physical cryptocurrencies and Basis, which recently folded due to mounting regulatory pressure, it can be presumed that there’s more to 1confirmation’s venture stakes than meets the eye.

Related Reading:  Sign Of The Times: Basis Shutters $133M Crypto Project Due To Regulation

1confirmation-backed Veil, a peer-to-peer prediction markets platform centered around Augur, went online just two days ago. Veil brings ease-of-use to Augur’s blockchain-based prediction markets, which struggled with adoption throughout 2018. As a result of the platform’s launch, REP, the native token of Augur’s ecosystem, has skyrocketed, posting a 70% gain in the past week.

Coinbase has also performed extremely well. As established by NewsBTC in previous reports, the San Francisco-based crypto startup was valued at a jaw-dropping $8 billion, allowing Coinbase to approach to start to approach the $13 billion price tag put on Pinterest. Interestingly, Coinbase is more valuable than Robinhood — another Silicon Valley startup focused on democratizing finance.

Besides funding and lofty valuations, Coinbase has also done well for itself fundamentally. Bloomberg, citing a document, once projected that the exchange was to make $1.3 billion in fiscal 2018, despite the dropping Bitcoin price. The firm has also continued to expand its offerings, making notable strides in Q4 of 2018.

And with that in mind, 1confirmation has likely posted healthy paper gains through its capital allocations towards Veil and Coinbase and its holdings in Bloxroute Labs, dYdX, Stellar-based security tokens platform Harbor, OpenSea, Nervos, and Vest.

Yet, a number of industry insiders are skeptical that crypto funds, in general, will garner any notable amounts of traction in 2019.

Analysts Skeptical Of Crypto Fund Prospects In 2019

Via a November edition of Off The Chain, a crypto-centric publication and media group, crypto crusader Anthony “Pomp” Pompliano remarked that crypto organizations “are in more trouble than people realize.” The Morgan Creek Digital Assets founder noted that he expects for crypto hedge funds, not too dissimilar from pure venture funds, to start “shutting down” due to certain clauses in legal documents.

He added that it could just be a matter of times before fund managers, who Pomp claimed were “young and inexperienced,” start to fold en bloc, falling victim to crypto winter, just like an array of leading industry upstarts.

Travis Scher, who heads crypto conglomerate Digital Currency Group’s in-house investment branch, echoed Pomp’s concerns in a recent interview with Business Insider. Scher told the outlet that while 2018’s first half saw a “tremendous amount of venture investments” enter the crypto realm, fund convictions are likely more bearish than bullish. Scher explained that hesitance by the way of financiers may make it much more difficult for organizations, whether venture groups or startups, to raise adequate funding.

The Digital Currency Group executive added:

“There is going to be a real struggle to raise new money. As there is going to be less money going into the crypto funds, there is going to be less money available for token projects.”

This post credited to NewsBTC. Image source: FreeDesignFile

Canadianbanking group supports the idea of using blockchain technology as part of a digital ID system for residents, national news agency The Canadian Press reported via various local media outlets on Jan. 15.

Speaking during a presentation at the Economic Club of Canada in Toronto, chief executive of the Canadian Bankers Association (CBA) Neil Parmenter said it was necessary for untamperable solutions to form the basis of ID procedures relating to the banking and finance sectors going forward.

The comments come as Canada eyes the opportunities afforded by so-called open banking, a reenvisioning of the banking field that would allow third-party companies such as fintech startups to participate and share access to user data.

The country’s government launched a public consultation into the concept last week.

“Instantly verifying who someone is using multiple digital reference points is more secure than relying on a photocopy of a driver’s licence,” Parmenter said, noting:

“Because this digital network is connected, yet decentralized, the risk of compromising the system is reduced by eliminating ‘honeypots’ of data that hackers tend to target.”

The CBA originally sketched out plans for digital ID in a whitepaper in May last year. The document did not make specific reference to blockchain, but praised ID systems currently being rolled out in Estonia and India as instructive for Canada’s future preparations.

The Indian scheme, known as Aadhaar, has nonetheless attracted criticism, including from within cryptocurrency circles.

Canada, meanwhile, is also looking to employ blockchain a state level in other areas, the most recent of which involving customs formalities at borders.

This post credited to Cointelegraph. Image source: Cointelegraph

Digital assets, such as Bitcoin and other cryptocurrencies, should not be regulated by the SEC and should be left to the jurisdiction of the Commodity and Futures Trading Commission (CFTC), according to Florida Congressman Darren Soto.

Congressman Calls for Better Classification of Digital Assets

Darren Soto, a Democratic party representative for Florida’s 9th district, has called for better classification of digital assets including Bitcoin and other cryptocurrencies. In an interview with Cheddar on Jan. 10th, the congressman shared his views on the future of digital assets in the U.S, saying that more regulation was necessary in order to protect the market.

“Securities laws can be very intense and hurt the market unless it’s truly a security,” Soto said. “Overall, we hope to establish jurisdiction and classifications so we can bring confidence and clarity into the market.”

According to Soto, cryptocurrencies should not fall under the jurisdiction of the Securities and Exchange Commission. Instead, digital assets should ideally be regulated by the U.S. Commodity Futures Trading Commission, the country’s main futures and options market regulator.

CFTC Chairman Says Crypto is ‘Here to Stay’, Federal Court Declares Virtual Currencies are Commodities
Related: CFTC Chairman Says Crypto is ‘Here to Stay’, Federal Court Declares Virtual Currencies are Commodities

Soto cited his experience in crafting bills regarding cryptocurrencies for his views. Back in December 2018, Soto introduced two crypto bills with Representative Warren Davidson of Ohio. The first one, “The Virtual Currency Consumer Protection Act of 2018,” calls for the CFTC to research price manipulation in cryptocurrencies and establishes when a crypto asset qualifies as a security, Cheddar reported.

The second bill, titled “The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018,” issued policy recommendations that would better accommodate the crypto market in the U.S.

Federal Agencies Can’t Agree on Classification of Cryptocurrencies

Classifying cryptocurrencies has been one of the biggest problems the industry has had to deal with. Despite its many regulatory agencies operating on a federal level, the U.S. has had a hard time categorizing digital assets.

The IRS, the nation’s tax collection agency, recognizes cryptocurrencies as property for the purposes of federal taxes. The SEC does not differentiate between crypto and fiat currencies but considers initial coin offerings to be securities.

This discrepancy in the very definition of digital assets has been the root cause of the SEC’s inability to pass any crypto ETFs or introduce any meaningful regulation to the industry. However, as Cheddar pointed out, the SEC does not craft the laws it follows, so the recent initiatives from Congress might push the commission in the right direction. As said by Soto:

“There’ll be a role for the CFTC and FTC to play and we’ll be saving the SEC for true securities, knowing predominantly that these are commodities and currency transactions.”

He explained that the CFTC and the FTC had a “lighter touch” and could easily be tasked with regulating the majority of crypto transactions.

We are yet to see a response from the two agencies, but Soto’s call for more clarification and better classification bring new hope to the troubled industry.

This post credited to Cryptoslate. Image source: Cryptoslate

When historians set out to chronicle the development of cryptocurrency, one of the first chapters will profile DigiCash, the early digital currency startup which, decades before Bitcoin, almost fulfilled the dream of giving the internet a native currency. However, that project’s inventor, cryptography pioneer David Chaum, wants his name to appear in the book’s subsequent chapters as well.

Chaum, now 63, is launching a new cryptocurrency project called Elixxir, which he claims has achieved the holy grail of network decentralization, blockchain security, and transaction speed.

In a Wall Street Journal interview published earlier this year, Chaum alleged that the technological innovations in Elixxir are game changers for blockchain adoption. “These breakthroughs I’ve made change the whole game,” he told the publication. “We can actually meet the requirements to go to consumer scale.”

David Chaum Digicash Elixxir
David Chaum | Source: Distributed/YouTube

Specifically, Elixxir implements an inversion of the traditional blockchain model, wherein transactions are aggregated into blocks and then processed by validating nodes. Chaum said that blocks will instead be produced prior to transaction batching, allowing the network to process payments quickly, even at scale.

It remains to be seen whether the production blockchain will meet Chaum’s lofty expectations while also achieving sufficient decentralization. In the meantime, Elixxir has announced that the project has received a strategic investment from Chris Larsen, the co-founder of blockchain startup Ripple and, by virtue of his Ripple equity and remaining XRP holdings, one of the wealthiest persons in cryptocurrency.

Commenting on the project, Larsen said that he was optimistic about Elixxir’s potential as a consumer-facing network. He said, “David Chaum has been a defender of privacy in the digital world for almost forty years. I am proud to be an early backer of Elixxir and look forward to seeing this consumer-facing blockchain open the door to secure use by millions of individuals in their daily lives.”

Also providing seed funding was H&D Company Pte Ltd., an investment firm based out of Singapore.

This post credited to ccn Image from YouTube/Berkeley-Haas

Hitachi Payments is entering a joint venture with the State Bank of India, the country’s largest bank, to establish a digital payments platform

The collaboration sees Hitachi Payments, the wholly-owned Indian payments subsidiary of 108-year old Japanese conglomerate Hitachi, join the State Bank of India (SBI) in developing a sweeping digital payments platform with applications in point-of-sale solutions (POS) and mass transit roadways in the country.

Hitachi Payments is investing in SBI Payment Services for a 26% stake, a press release confirmed, building on its relationship with the state-owned bank as its technology provider for card and digital payments since 2011.

Specifically, the tech giant is using its expertise in big data analytics and artificial intelligence (AI) to introduce “Lumada”, its IoT platform to the Indian payments sector.

“Hitachi will provide wide range of services contributing to “Digital India” by creating innovative solutions with ‘Lumada’,” Hitachi said. “With this joint-venture, Hitachi will accelerate digitalization of financial services in India by linking up digital payments platform to state-of-the-art digital technologies of “Lumada”, and also will provide solutions for mass transit sector and e-commerce businesses.”


108-Year Old Japanese Conglomerate Hitachi Tests Blockchain for Retail Settlements 

Japanese Conglomerate Hitachi Tests Blockchain for Retail Settlements

Multinational conglomerate, Hitachi Ltd, and telecommunications operator, KDDI Corporation, have disclosed they are testing a blockchain solution that will see the biometric features of shoppers…

Hitachi Payments notably manages over 55,000 ATMs and 850,000 POS devices in India. With over 420 million customers, the State Bank of India also has over 6 million POS terminals in the country. The bank sees over 70% of its current network managed by Hitachi Payments.

Hitachi president and CEO Toshiaki Higashihara added:

“By establishing the joint venture with SBI, Hitachi will further contribute to the development of digital payments in India by building a state-of-the-art digital payments platform and leveraging SBI’s robust customer network.”

This post credited to ccn Image from Shutterstock.

The chairman of the Distributed Ledgers and Artificial Intelligence taskforce, Bitange Ndemo has advised the Kenyan government to tokenize its economy in order to deal with the increasing issues of corruption and uncertainty.

Ndemo made known his opinion during a meeting between the Kenyan ICT ministry stakeholders and members of the private sector. He noted that the East African country needs a digital currency that would stand side-by-side with fiat.

“We must begin to tokenize the economy by giving incentives to young people to do things which they are paid through tokens that can be converted to Fiat currency,” Ndemo said

Kenya is Open to Innovation

Kenya is one of Africa’s leading countries in terms of blockchain and cryptocurrency development. Some of the region’s largest blockchain remittances originated from Kenya. Beyond remittances, the East African nation is notable for the friendly environment that it provides for not just blockchain, but technological innovations in general.

Active legislative discussions over blockchain and cryptocurrency related programs show the interest that the Kenyan government have in blockchain technology. This is evident in the government’s effort towards finding proper regulatory frameworks for the technology over time.

In August 2018, the country’s electoral commision even showed signs of adopting blockchain technology in voting processes.

According to Ndemo, Tokens are like bonga points given by mobile operators or loyalty points given at the supermarkets, it can be converted to coins and used to buy goods of any choice by the user.

More Education Needed

The Distributed Ledgers and Artificial Intelligence task force which was inaugurated in March has earlier recommended a Central Bank Digital Currency to operate in fixed nominal terms and as a valid legal tender. This is an idea that has been abolished, or rather sidelined for the time being.

ICT’s Jerome Ochieng, however, noted that there needs to be an increased level of awareness about tokens and how to use them before any major steps can be taken. He sees public enlightenment in this area as a very crucial factor that must be put in place before any advanced government action.

“We are not very enthusiastic at the moment, of course, it will come, but we first want people to understand use of tokens”, says Ochieng.

Ndemo’s task force continues in its assignment to determine the appropriate and implementable use cases of blockchain technology within the Kenyan technological and economic environment. This will further enhance the country’s position as a hub for innovation and a fast developing nation, especially when it comes to innovation.

This post credited to ccn Featured image from Shutterstock.