BitDigest April 20 · Issue #640

• Crypto pricing inches down overnight
• The People’s Bank of China acknowledged trialing its digital currency program during a segment on state-run television
• Jim Simons’ Renaissance Technologies flagship fund will be permitted to trade in bitcoin futures

Central Bankers Focus on Development of Digital Payment System Over Need for Central Bank Digital Currency

On Friday, the Chamber of Digital Commerce and the Reinventing Bretton Woods Committee hosted a discussion headed by James Bullard, the President of the Federal Reserve Bank of St. Louis, Olli Rehn, the Governor or the Bank of Finland, and Benoît Coeuré, Head of Innovation Hub, Bank for International Settlements on  “The World Economy Transformed: Reflections on Policy Responses & The Future Post Pandemic Monetary Architecture.”

All three agreed with Coeuré’s statement that the COVID-19 virus has exposed the values of technology as the pandemic has accelerated the development of central bank digital currencies and digital monetary payments.  Bullard questioned the US’ ability to provide assistance checks to all citizens, suggesting that if all Americans had bank accounts at the Fed, this would be easy to do, but he stressed that while this would be very “easy to legislate, [it would be] hard to implement.” Rehn diverted from the question on digital currencies and said central bankers need to be “more practically focused and need to support real time mobile payments.” Coeuré repeated his previous statements that we need global cooperation around interoperability, financial inclusion and cross border payments.

When questioned about the introduction of the Chinese DCEP, they all said they were actively watching the developments with an open mind, and Rehn quoted a fellow economist and joked, it would be better if a “non-systemic country” like neighboring Sweden tried it first. 

The Headlines

PBoC Confirms DCEP Trials

www.cointelegraph.com

A People’s Bank of China appeared on Chinese Central Television to confirm that digital currency / electronic payments (DCEP) tests are occurring but stressed that this does not yet imply that the digital yuan has been issued for public use. The PBoC also stated that a 100% reserve will be required from any institution looking to issue the product. “The current closed test of digital Yuan will not affect the commercial operation of listed institutions, nor will it affect the RMB issuance and circulation system, financial market and social economy outside the test environment,” the official said.

South Africa Releases Regulator Framework for Crypto Assets

www.ifwg.co.za

South Africa’s regulators have released a position paper on crypto assets. The Regulatory Working Group found that “crypto assets and the various activities associated with this innovation can no longer remain outside of the regulatory perimeter.” The paper provides a framework with a “clear policy stances on the variety of emerging use cases … in order to deepen regulatory certainty.”

Cybercrime Has Jumped 4X During Coronavirus

www.zdnet.com

An FBI official says that cybercrime, including attacks by foreign countries, has spiked since the outbreak of the COVID-19 pandemic. Whereas [Internet Crime Complaint Center] might typically receive 1,000 complaints a day… they’re now receiving something like 3,000 – 4,000 complaints a day… [and] a good number of those are” COVID-related. FBI officials also noted that attacks have been carried out by foreign countries, targeting the national healthcare sector and the US’ COVID-19 research capabilities.

Renaissance Looking in to Bitcoin Futures

www.files.adviserinfo.sec.gov

Renaissance Technologies, the quantitative hedge fund led by Jim Simons has released a filing with the SEC stating that its flagship Medallion Fund will now be “permitted to enter into bitcoin futures transactions, which Renaissance will limit to cash-settled futures contracts traded on the CME.” Although publicly stating the ability to trade bitcoin futures, the hedge fund calls bitcoin a “highly speculative asset” that “involve[s] substantially more risk and potential for loss relative to more conventional financial instruments.

Facebook to Hire for Calibra Wallet

www.irishtimes.com

Calibra, the Facebook entity developing a digital wallet for Libra, plans to add as many as 50 jobs in Ireland by the end of 2020. The pace of hiring depends in part on securing regulatory approval for the libra project.

Market Data

Ethereum 2.0 Mines Genesis Block

www.reddit.com

The new release of Ethereum (2.0) which turned to proof-of-stake instead of the more tradition proof-of-work consensus mechanism has mined and validated its Genesis Block on a testnet.

Economist Survey on Evolution into Cashless Society

www.digitalcurrency.economist.com

The Economist Intelligence Unit released a study on “digimentality” and how digitization will evolve into a cashless future. The report found that 83% of respondents are “likely” to eventually use digital payments instead of cash for daily transactions, with 34% expressing the use will primarily be for online purchased and payments. When asked if people found a government issued digital assets (CBDC) to be more trustworthy than a digital currency issued by a large financial institution or international technology firm, 54% of the respondents preferred the sovereign stable coin compared to 40% and 36% respectively.

$3 Billion in 'Dry Powder' Waiting for Crypto Moves

www.dailyhodl.com

Digital currency news and data site Messari identified that more than $3 billion in stablecoins are currently sitting on digital currencies exchanges. Messari suggests that if investors wanted to cash out of crypto they would have withdrawn the funds from the exchanges, but instead chose to wait for the next market move.

Exchange, Custody and Product News

Microbt Launches New Industry Leading Mining Rig

www.news.bitcoin.com

Chinese crypto mining equipment manufacturer Microbt announced the release of the new M30S++ miner that processes speeds up to 112 terahash per second (TH/s) – up to 18% more terahash than Bitmain’s latest release.

Thoughts on the Ecosystem

Nassim Taleb Urges Lebanese to 'Use Cryptocurrencies!'

www.twitter.com

The Black Swan author Nassim Taleb responded to a tweet stating that the Bank of Lebanon has forced investors to accept foreign currency remittances to be paid in “worthless [Lebanese] Lira” by suggesting that people turn to an alternative and “use cryptocurrencies!”