BitDigest March 23 · Issue #620

• Crypto markets fall 13%, losing $25 billion since Friday morning, as $1,000 is erased from price of one bitcoin
• IMF official highlights positives and negatives of central bank digital currency
• Chine releases another negative stance on digital currencies

There has been lots of discussion about the US government’s plans to provide direct cash assistance to Americans hurt by the coronavirus pandemic. I spoke to several people who were concerned about how they would receive their $1,200 payment. In one case, the person had just moved and was unsure whether they will still receive their check in the mail.

I am sure this is obvious to readers of BitDigest but wouldn’t it be easier to send the $1,200 if the US government issued a central bank digital currency? The money would be sent and magically, instantaneously appear in your digital wallet. There would also be a publicly auditable record of the transaction so there would be no questions about if and where the payment was sent. Instead, we are working with an antiquated system that is going to delay delivery of the funds to the people who really need the money right now.

The Headlines

IMF Deputy MD Addresses Positives and Negatives on Central Bank Digital Currencies

www.imf.org

The IMF just released Deputy Managing Director Tao Zhang’s February 28th address on Central Bank Digital Currencies (CBDC). Zhang highlighted CBDC’s as being a more efficient payment system, enhancing inclusion, providing greater stability and lower barrier to entry for new firms in the payment system, enhancing monetary policy, and a means of countering new digital currencies, but he also warned that their release could lead to banking sector disintermediation as individuals consider moving their deposits from commercial banks to CBDC holdings, and the “run risk” as customers fee from traditional deposits to CBDCs which could also cause implications to the central bank balance sheets as the bank could need to provide liquidity to banks experiencing rapid and large funding outflows.

Bank of China Warns Against Investing in Crypto

www.cointelegraph.com

The Bank of China published an anti-crypto report on its official WeChat account. Arguing that bitcoin’s volatility limits its ability to be considered a safe haven, bank officials warned consumers not to invest highlighting the high level of fraud transactions by bots, and existence of market manipulation and money laundering.

Indian Government Engaging RBI and SEBI in Crypto Discussions

www.news.bitcoin.com

The government of India is reportedly discussing a regulatory framework for cryptocurrencies with the central bank (RBI) and the Securities and Exchange Board of India (SEBI). “The government is weighing whether the virtual currencies can be regulated by the Reserve Bank of India … A framework for the regulation will be decided upon after deliberations with the central bank,” Bloomberg reported.

Fed Wire Delay Impacts Crypto Settlement

www.frbservices.org

On Friday the Federal Reserve’s Fedwire Fund network, the real-time gross settlement system used by the Fed to transfer funds electronically between member institutions, experienced operating difficulties causing delays in the receipt of US wires. Both Silvergate and Coinbase reported problems wiring funds to their clients. As of this morning, the Fed is reporting all systems are fully operational again.

Homeland Security Identifies "Blockchain Managers" in Food and Agriculture as "Essential Critical Infrastructure Workers"

www.scribd.com

The Cybersecurity and Infrastructure Security Agency (CISA) , operating under the auspices of the Department of Homeland Security, released a memorandum listing which workers are “Essential Critical Infrastructure Workers” to help State and local officials as they work to protect their communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security. The CISA’s initial list identifies “blockchain managers” as critical to managing and supporting the food, feed, and beverage markets.

Abu Dhabi Prepared to Trade Digital Assets by Q2

www.tradearabia.com

Abu Dhabi Global Market (ADGM) expects to launch regulated digital asset trading next quarter. ADGM is developing the regulated market place to help drive economic transformation in the Emirate’s economic base and bring about global integration.

World Federation of Exchanges Support Crypto Assets in Response to EU Commission

www.world-exchanges.org

The World Federation of Exchanges (WFE), the London based trade association of publicly regulated stock, futures, and options exchanges, has released a response to the EU Commissions proposed framework for digital assets. The WFE provided a detailed response to over 30 questions based on the opinion that there is value in adopting a single EU classification (subcategory) covering digital-assets and crypto assets.

SEC Details Argument Against Kik in Trial Documents

www.courtlistener.com

The SEC has released its arguments against Kik’s attempt to raise funds through an initial coin offering. The SEC argued that Canadian messaging app’s token should have been viewed as a security especially as the company suggested it would work to build the value of the token.

Fidelity Supports Application of SOC Framework to Digital Assets

www.fidelitydigitalassets.com

Fidelity Digital Assets released a paper reviewing the SOC (System and Organization Controls) reporting framework to digital assets. Fidelity sees the use of this framework as an example of the maturing nature of the market thereby providing strong, standardized assurances and transparency to stakeholders.

Tezos Foundation Settles Class Action Lawsuits

www.tezos.foundation

The Tezos Foundation announced that it has entered a settlement of all putative class action lawsuits. While continuing to believe the lawsuits were meritless and in denying any wrongdoing, the Foundation said it chose to settle in the interest of both the project and community.

Bitcoin Named to Fortune's 100 Greatest Designs of Modern Times

www.fortune.com

Fortune Magazine has named bitcoin to its list of the greatest designs of modern time. Bitcoin ranked 90th writing that “bitcoin wasn’t invented, it was designed so that a wide range of stakeholders—developers, investors, businesses, miners, individuals—all had incentives that reinforced adoption of a new digital currency, without any central issuer or governing authority.”

Market Data

Bitcoin Block Time Spikes

www.bitinfocharts.com

Bitcoin’s blocktime spiked to a recent high over 14 minutes last week. Bitcoin has not been at this level since last October. The blocktime has decline and is now at 11 minutes, a bit high than the 10 minute design.

Australians Not Using Digital Assets as Medium of Exchange

www.rba.gov.au

A study by the Reserve Bank of Australia found that while over 80% of Australia are aware of digital currencies as an alternative payment method, only a very small segment of people actually used cryptocurrencies to facilitate a transaction over the past 12 months.

CB Insights Releases Annual Blockchain Report

www.cbinsights.com

Market intelligence firm CB Insights released its 2020 Blockchain Report. The report found that while funding dollars declined by 30% last year, deal activity was flat as the market looked to Asia for opportunities. VC’s were the most active investors last year and enterprise blockchain funding reported to be weaker.

Exchange, Custody and Product News

Bitfinex to Remove 87 Trading Pairs

www.bitfinex.com

BitFinex announced it is removing 87 trading pairs. Key tokens being eliminated include Ripio Credit Network (RCN/BTC) and Decentraland (MANA) and Qtum (QTM) to ether (ETH) .