BitDigest November 20 · Issue #789

• Bitcoin jumps back above $18,000 and ether breaks $500; all REBEL coins report positive 7-day and YTD results for first time this year
• SEC Chairman Jay Clayton says he expects to see more regulation around the digital payment space
• IRS Looking to issue new rules for treatment of digital currencies

Blockchain is at a Tipping Point

Over the past few days Economist Nouriel Roubini reiterated his belief that blockchain is the “most overhyped technology ever.” Ken Seiff and the team at Blockchange Ventures recently published an investor letter that clearly disagrees with Roubini’s statement and suggested that blockchain is on a trajectory to become a generation technology shift as consequential as the internet. They identified 6 reasons why they see blockchain “at a tipping point:”

1. We are beginning to see large markets and applications emerge beyond cryptocurrencies and speculation.
2. COVID-19 – and its economic fallout – have highlighted strains in legacy systems and accelerated the conditions for blockchain adoption.
3. Top-tier enterprises are adopting the Blockchain.
4. High-quality talent is entering the blockchain sector from top companies.
5. For the first time, large companies and financial institutions have made significant and very public investments in Bitcoin.
6. Institutional grade blockchain infrastructure has arrived.

The Headlines

Expect More Regulation in the Payment Space

www.twitter.com

📺Outgoing SEC Chairman Jay Clayton described bitcoin as a ‘payment mechanism’, not a security, and although he believes that current payment mechanisms have inefficiencies which is “driving the rise of bitcoin” he expects to eventually see more “regulation around the payments space.”

US Weighing Trade-Offs in Crypto Tax Rules

www.news.bloomberglaw.com

A top Treasury official says the Internal Revenue Service is working on new rules for the tax treatment of digital currencies and deciding between a more risk focused approach (like the international Common Reporting Standard) or one that focuses on tax liabilities by reporting transaction.

CBDCs Have First Mover Advantage

www.bloomberg.com

📝A European Central Bank study says there is a first mover advantage with CBDC;s suggesting that a country without a digital currency would lose some control over its monetary policy by being forced to react more strongly to spillovers from shocks in nations that do have such an instrument.

Digital Switch Has Been Flicked

www.bankofengland.co.uk

The Bank of England’s chief economist sees an opportunity in using digital finance to combat the historic high cost and limited access to payment services for individuals and lending to small and medium sized enterprises.

Brazilian Politicians Tracking Campaign Donations on Blockchain

www.cryptobriefing.com

Brazilian political candidates have announced a program that will use decred (DCR) as the underlying token to timestamp and record political campaign donations.

SEC Issues No-Action Letter on VCoin

www.sec.gov

The Securities and Exchange Commission has issued a no-action letter to avatar social experiment company IMVU allowing the firm to sell its VCOIN digital tokens for fiat with reservations such as that tokens can only be used for the prescribed design and not used to speculate on price.

Japanese Companies to Begin Work on Digital Yen

www.reuters.com

30 Japanese firms, including Japan’s three largest banks, will begin to experiment with a private digital currency that will be built on a common settlement platform.

Ebang Prices Follow-On Shares

www.ir.ebang.com.cn

Ebang International (NASDAQ: EBON) announced the pricing of a follow-on public offering of 4 million units at a purchase price of $5.25; EBON closed yesterday at $5.34.

Exchange, Custody and Product News

OKEx to Open Withdrawals in One Week

www.okex.com

After 5 weeks, digital currency exchange OKEx announced it would reopen customer withdrawals by November 27th. Bloomberg published an article explaining the “probe that forced OKEx halt.”

Bitcoin Shutting US Accounts

www.binance.com

Binance has sent numerous email over the past several days notifying US account holders that they plan to close trading accounts; accounts without any funds are being shut down immediately and accounts with funds have 14 days to withdraw all assets from the exchange.

Gemini Chooses UK Bank Provider

www.clear.bank

Gemini exchange has selected cloud-based clearing bank ClearBank to provide banking services to its clients in the UK.

Thoughts on the Ecosystem

Digital Yuan to Reach 1 Billion Users in 10 Years

www.coindesk.com

📝Goldman Sachs expects China’s digital currency electronic payment to reach 1 billion addressable users and $2.7 trillion in annual total payment value and 15% of total consumption payments within the next 10 years.

Privacy Coins Are Likely Unstoppable

www.cryptobriefing.com

📝The Copenhagen Business School has published a study on private digital currencies suggesting that a regulatory ban would be nearly impossible due to the token’s untraceable, privacy preserving, decentralized nature.

Bitcoin Price Could Gain Zeros

www.youtu.be

📺Bloomberg Intelligence strategist Mike McGlone believes bitcoin could follow gold’s path and consolidate below $20,000 in the short term but thinks that this year’s addition of a “1” to bitcoin’s price (adding $10,000 to bitcoin’s year ending 2019 $7,000 price) could easily turn to the addition of a “zero to the back of the number.”

Bitcoin, a Distraction

www.businessinsider.com

SoftBank CEO Masayoshi Son says that although he has bought (and sold) bitcoin he still does not understand it and considers watching BTC’s daily price fluctuations a distraction to his own business.

Ripple CEO Concerned About Chinese Influence on Bitcoin

www.bloomberg.com

📺Ripple CEO Brad Garlinghouse suggests that bitcoin’s Chinese mining influence could dominate the bitcoin market and give China an advantage in the battle for the next global financial infrastructure and payment system.