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Stablecoin and Its Potential Business Uses

Blockchain innovation has significantly changed the way we thought in the traditional financial sector. All of those concepts and business models, such as decentralization, cryptographic tokens, and digital ledger, also brought us more imaginations toward the future forms of money. Although we are still facing the disorder from the 2017–2018 ICO chaos and increasingly strict regulatory frameworks, the overall trend of crystallization should be irreversible. The development of financial digitalization and proper use of technologies can empower our economy, even provide a great opportunity to overcome those development challenges. The concerns, therefore, can be argued that how we can bring awareness and build trust to consumers, and how to monitor and eliminate those crypto risks for the financial institutes and regulators?

The stablecoin may be a possible solution in a world that fiat is in flux while the innovation has the possibility to transform the landscape of financing and banking. By definition, stablecoin is a cryptocurrency — an internet-based medium of exchange, backed by valuable assets in the real economy. If you take US dollars between 1945–1970 as an example, each USD should be equivalent to 1/35 of an ounce of gold (however President Nixon tore apart the Bretton Woods Agreement in 1971 but that’s another story). In the crypto world, stablecoin services in a very similar function, it can be traded as the medium in any transaction because the stablecoin itself pegs its market value to some external reference, for example, USD, other fiat currencies, or commodities such as gold. Indeed, the most common style of stablecoin is backed by fiat currency at the 1:1 ratio, like USDT and Tether — both are backed by USD. Ideally, the stablecoin requires sufficient reserve assets to keep the volatility-free valuation of that “coin”, then it can be used in daily exchange — from trading other cryptocurrencies in exchanges to buying food in a physical shop.

Another interesting private project is QDAO — a fully decentralized stablecoin backed by crypto assets, which brings the discussion to the next level. While other stablecoins pledge to assets such as US dollar or gold, QDAO chooses to accept Bitcoin (or potentially other crypto assets) as the fundamental collateral (it needs to deposit or lock up certain amount of his crypto asset) and the user can decide if he wants to create any fiat-based stablecoin for further use. For example, the term “USDQ” represents a fully USD-backed token while another term “JPYQ” means the token is supported by Japanese Yen or “CNYQ” with Chinese Yen as the target. Of course, according to the basic rule, the reserve assets should always exceed the value in circulation, PLATINUM ENGINEERING (the team initiated this idea) has designed algorithms, deposit & settlement mechanisms and smart contract-driven ecosystem for supporting such stablecoin creations. The way that stablecoin is still pegged to the fiat at a 1:1 ratio but take BTC as the underlying collateral has become more popular and flexible for business cases in recent years. Actually, many decentralized finance (DeFi) projects (including QDAO) already applied this “over-collateralization” principle to develop their lending models. It’s believed that the proper stablecoin mechanism should not only defense against malicious actions/speculations, but also it should provide price stability and security for the transaction, payment, and further utilities in the financial market.

Besides those brilliant private sectors, government and public sectors also start paying more attention to a crypto solution, especially the stablecoin (due to conservative governments may not be in favor of anything “unstable”), and how to optimize our banking and even the monetary policy. The synthetic central bank digital currency (CBDC) has been introduced by the World Bank Group since the beginning of 2019. The framework aims at offering a possible path that trustable private sectors could work with the central bank and inject digital money into the market, or we can even call it the fin-tech public-private partnership for the future economy. If you are a believer in free market, the sCBDC should be an exciting approach that unlock the last economic power from sovereign government — the seigniorage (note that it assumes most of the commercial & financial activities have been privatized in the modern democratic nations, but the seigniorage is still solely and completely controlled by the central bank). Indeed, the idea of “decentralization” or “reconstruction of power” is not new, 40 years ago the Anglo-Austrian economist, Friedrich Hayek, already argued something similar in his book “The Denationalization of Money”. But of course, at that moment, the word “digital” was not yet brought to public attention.

Blockchain technology, cryptocurrency, and stablecoin should be regarded as the disruption for the financial landscape, and the monetary value can be electronically stored and pegged to a safe and liquid asset also sheds light on new payment and the accessibility to financial services. We have more than 2.5 billion individuals and 200 million SMEs lacking access to basic credit and financial support (World Bank, 2014), thus it’s persuasive that digital finance, or in more specific mean — the stablecoin, should be able to create more opportunities to not only advanced markets but for people in developing regions. The government and central bank might move slowly in this unfamiliar territory, however, the private sector can actively act as the infrastructure builder and service provider.

As Mr. Jin-Young Cai, the CEO of International Finance Corporation (IFC), pointed out in the CGAP event speech that “the benefits of digital finance extends well beyond conventional financial services; it can also be a powerful tool and an engine for job creation in developing countries”, it’s foreseeable that the role of stablecoin, digital money, and DeFi solution will become more important, especially for SME businesses and eventually be adopted by the general public. The following regulatory complexities and impacts on other fields shall be the nest essential topics to everyone.

Circle's New APIs Simplify Complex Crypto Concepts For Mass Institutional Adoption

Circle, the main stablecoin leveraged by Coinbase, has expanded its services to programmable functionality of its USDC stablecoin.

Circle revealed three new APIs for businesses in a blog post on March 10. The new tools for developers are aimed to facilitate the use of USDC by traditional businesses and additionally create a digital replacement to traditional fiat channels. API tools allow software developers to build on top of and interact with an application.

Programmable Dollars For Business

The first API update, Circle’s Payments API, facilitates the use of credit card and debit card payments by businesses to then settle payments in USDC. This should greatly expedite the time it takes for businesses to receive funds from weeks to days.

Circle will also allow its users to receive cryptocurrency payments without running nodes via its Wallets API. This API provides a simplified layer of familiarity for traditional business to effectively leverage complex concepts in cryptocurrency such as gas fees or private keys.

Finally, Circle’s Marketplace API allows customers to use USDC in other ways. For example, businesses can use the API to “top up” customer funds, enable peer-to-peer payments, or pay suppliers.

In the blog post, Jeremy Allaire, CEO, Circle said, “Until recently, for a business to take advantage of this infrastructure it has often been complicated and confusing. Crypto wallets, exchanges, blockchain transaction management, gas fees, private key security, banking connectivity, and compliance hassles have all been technical and operational impediments to the average internet business jumping into digital currency.”

Circle is currently offering early access APIs, but production APIs are on the way.

A Catalyst for Institutional Adoption

With the launch of the new APIs, Circle aims to simplify the world of digital payments so that company can setup and begin using an account with the same ease that they might open a business bank account.Allaire said “Companies should be able to then easily upload their dollars to the internet, convert them into digital currency dollars, and start storing and using these stablecoins for everyday payments.”

Circle Sold OTC Business to Re-focus on Stablecoins

As reported by Blockchain.News on Dec 18, Circle had announced that they would approach 2020 with a renewed deep focus on stablecoins and the powerful potential they hold for people, enterprises, and governments globally.

On Dec. 17, the founders of Circle announced in a blog post, the sale of its Circle Trade OTC business to Kraken. Spokespersons from Circle stated that they are confident that Kraken will continue to deliver a best-in-class OTC liquidity service to its former customers.

Along with the sale of the OTC business, Circle made a number of organizational changes to help align their operation and talent to match its stablecoin platform service focus and future roadmap. Notably among these changes was the successful sale and restructuring of Poloniex, its exchange business, to a standalone company backed by an Asian investment group. It appears that Cirlce has made good on their goal to focus on moving forward by building on Circle’s core services which support its stablecoin. At the time Allaire said, “These APIs will be offered as services to businesses and developers everywhere who will be able to take advantage of the innovation and efficiency of stablecoins without the cost, complexity, and risk of implementing this infrastructure themselves.”

Image via Shutterstock

How Does Cryptocurrency Regulation News Affect the Bitcoin Price? Bank Of International Settlements Research Reveals

New research conducted on behalf of the Bank for International Settlements indicates that contrary to popular belief, the Bitcoin price and other cryptocurrency prices respond very positively to news of incoming regulations,when they are clear.

The Dallas Federal Reserve Bank’s Globalization Institute recently published a working paper by researchers from the Bank for International Settlements which found that crypto markets react positively to clear regulations and often decline at news of central bank resistance and bans.

Crypto Markets Thrive With Clear Regulation

It may be no surprise that the official white paper reveals that cryptocurrency markets tend to take a plunge when news surfaces of a potential government or central bank imposed ban on the horizon. The findings ,however, show clear evidence of the markets surging when clear crypto regulations are announced.

Source: Federal Reserve Bank of Dallas Globalization Institute

The researchers analyzed Bitcoin and other cryptocurrencies to determine the factors that were instigating price movements in relation to official government action. Tackling the question directly, the BIS researchers wrote, “Why do news events about national regulations have such a substantial impact on cryptoassets that have no formal legal homes and are traded internationally? Part of our interpretation is that cryptocurrencies rely on regulated institutions to convert regular currency into cryptocurrencies.”

The above indicates that having clear regulatory oversight when bridging the traditional markets to the crypto markets through fiat on and off-ramps are still important to crypto traders as are finding official institutional channels.

Despite its reputation of wanting to be left well alone by regulation, the new research highlights the contrary and clearly indicates that at this fork in crypto’s history, as put by the researchers,”authorities around the globe do have some scope to make regulation effective,” as the community appears to be seeking more regulatory clarity, not less.

BIS Reports on the Changes to Payment Industry and COVID Impact

As reported on April 15, the Bank for International Settlements (BIS) has previously released a quarterly report on the changes in the payment industry, including the market impact of the recent coronavirus outbreak.

Some of the trends mentioned in the report include stablecoins, tokenized securities, CBDCs, cross-border payments, and peer-to-peer payments.

The pace of change and innovations’ potential for disruption in the payments industry was one of the key takeaways of the report. In turn, this has propelled payment systems to the top of policymakers’ agenda, according to the BIS.

Prepare for Bitcoin’s Early Adopters (They’re Not Who You Expect)

In the classic “diffusion of innovations” theory, new technology has to progress from innovators to early adopters before it can go mainstream.

Innovators are the 5% of people who adopt technology while it’s still experimental. They prove the concept.

Early adopters come next.

Generally, these people have connections with innovators, a high degree of thought leadership, or some social status or financial liquidity that lowers the risks of adopting bad technology. They’re your first users, the people who make everybody else think the technology is safe and useful.

Cryptocurrency has struggled to get these people en masse. You and I remain a very small class of users, and while our ranks continue to grow, it will take something special to get enough of us to push cryptocurrency into the mainstream.

Something special just arrived.

A new awareness among an old group

As the world struggles with the pandemic disease, financial crisis, and global economic turmoil, I noticed a new awareness among old people and business leaders.

What’s this awareness?

That the internet is a good thing.

For the first time, these people had to use it—not just for sending emails and Powerpoint decks, but also for teleconferences, online training, screen sharing, Slack, Zoom, cloud storage . . . you name it.

Guess what happened?

They realized with a little training and some new habits, they can save a lot of time and money without losing too much productivity. Some even gained productivity.

Now, banking from home is a life-saving convenience. Video chats are cost-effective ways to connect with friends, family, and colleagues. Virtual paperwork really is easier than ink pad signature stamps. Downtown offices really are too expensive. My millennial subordinates really can be productive without coming into the office.

You might not think these people matter for cryptocurrency because they embody the legacy system. They don’t care about cryptographically-secure, time-stamped, distributed digital ledgers, nor do they think about the flaws of fiat money and inflationary central bank policies. Yet, these people have money and power. They run our businesses and governments. Depending on what survey you believe, they hold as much as $70 trillion worth of financial assets.

Inevitability is a selling point

This year, they have driven a surge in demand for virtual services.

While some of this demand will subside as life goes back to normal, some will stick.

A lot of routine doctor visits and most consultations will move to telemedicine. Many meetings and almost every clerical or paperwork process will migrate to a digital platform.

Companies will shift some positions to permanent telework. Mortgages and many routine financial transactions will settle using secure, internet-based commercial platforms. Companies will replace their payment processors with lower-cost, more nimble platforms like Stripe.

Even governments will change the way they deliver services and manage their money systems. China is testing its digital yuan. The U.S. Federal Reserve accelerated progress on its digital dollar. European Union is tinkering with blockchain.

Everybody wants to get rid of patchwork legacy systems, paper checks, physical banknotes, and layers of databases.

None of these shifts need to include blockchain technology. Most won’t. That’s not the point.

The point is more and more people recognize the flaws in our commercial and financial systems.

While blockchain technology still has its limitations, it offers an alternative to the complexity and security challenges of digital platforms. For example, bottlenecks and security issues or the costs and drawbacks of authenticating legal documents, verifying identity, and protecting privacy and confidentiality.

As the key innovation that gives value to blockchain technology, cryptocurrency will get a lot of attention. Curiosity, perhaps, at first—but that’s where it starts.

As a person in finance told me, lots of his clients have a sense that crypto “is the way everything’s going.” Inevitability is a very compelling concept.

An alternative, not “the” solution

It’s not that people necessarily want cryptocurrency. It’s that they’re open to the idea of cryptocurrency. They’re willing to explore and experiment.

That’s exactly the type of behavior that will lead them to try out a beta project or tinker with some features, such as sending a private transaction on Ethereum, staking some crypto, or using XRP to settle money transfers.

If this seems premature, consider how far cryptocurrency has come since the 2017 boom. Many projects now have mainnets, dApps, and real usage beyond trading. Wall Street veterans now run crypto funds and crypto-related businesses. Universities teach blockchain. Some governments have crafted legal frameworks to protect and promote cryptocurrency.

DeFi has shown that you can manage financial systems without governments. Bitcoin has shown you can send money to people without banks. Altcoins have shown you can use money systems to solve social, political, and business problems.

True, on a small scale. This is still a young, developing technology. But it doesn’t have to be great yet. It just needs to work.

That’s great, Mark. When moon?

More people understand that crypto is not about creating a new Venmo, but rather, building global, permissionless networks that all people and businesses can use.

Does that mean bitcoin will get a massive rush of money and innovation tomorrow?

No. It takes time for people to wrap their heads around what’s going on. Awareness does not mean action.

Wall Street has only just started to corner the market for their clients. The lightning network hasn’t caught on the way everybody expected and DeFi platforms still have operational, security, and regulatory issues to fix before they can go mainstream.

Also, your average person is worried about their job, their business, their family, and so many other problems. Even if they had money to spare, they probably aren’t going to put it into bitcoin.

If you want that big, massive, life-changing bull market that sends prices into the stratosphere, this is a good thing.

You need people to commit to this market. They need to care so much that they’re willing to suffer through 30-40% crashes, threats of government bans, failures with DeFi protocols, faulty oracles, high transaction fees, and all the growing pains cryptocurrency has suffered over the years.

In other words, you need to wait for the early adopters to make everything seem safe for the mainstream. Then, the floodgates will open.

Growth comes from Conviction

Those early adopters need to want this technology to succeed. Otherwise, they will not spread awareness or advocate for its use.

Jumping the FOMO bandwagon won’t get us there. Once the wheels fall off, everybody will disappear.

The good news is, conviction has entered the markets.

As I’ve shown to readers of Crypto is Easy, we have a lot of evidence that bitcoins have flowed into the hands of long-term HODLers and institutional investors—people who are willing to ride the market up and down.

Meanwhile, altcoins have seen a steady rise in users, apps, and transaction volume. While that could change any moment, it suggests interest is spreading beyond traders and speculators. It’s not “buy low, sell high” but actual usage and commitment to projects.

Ranks are growing

In other posts, I’ve talked about the opt-out movement, that mass of angry people looking for a way out, latching on to cryptocurrency as a peaceful, passive way to escape their political and economic systems. Something along the lines of Lucas Cacioli’s recent post, “Bitcoin Adoption is the Ultimate Protest Against Government and State Abuse of Freedoms.”

Now, I also see the potential for professionals and old people to join them—not as a political statement but because “that’s the way everything’s going.”

Can you imagine how the perception of cryptocurrency will change when professionals use it to boost their businesses or fix problems with the traditional financial system? When old people buy a little bitcoin as part of their estate or retirement portfolio?

Perhaps we’re not there yet, but it won’t take much longer. Paul Tudor Jones opened a lot of people’s minds to bitcoin as an investment asset. Jamie Dimon opened a lot of people’s minds to crypto as financial technology. Others have made their own contributions to public discourse.

Combined with this larger social awareness of the need to move into the digital world, and a reaction to the problems authenticating, verifying, and exchanging “things” in a virtual world, we may finally have all the momentum needed to move into the next phase of adoption.

JPMorgan Blockchain Spin-Off Kadena Releases Blockchain-Based App that Verifies Coronavirus Tests

According to the World Health Organization (WHO), there have been more than 9 million COVID-19 cases around the world and over 473,000 deaths as of press time. In light of the recent global crisis, the most important and highly anticipated medical milestone in the world today is the discovery of the COVID-19 vaccine.

COVID-19 testing remains one of the most stressed medical lab procedures today; pressurized with an unanticipated virus that threw our world into a pandemic. Some businesses are looking at integrating emerging technologies such as blockchain to fight the coronavirus.

Magic of the modern ages: Kadena

Kadena LLC, JPMorgan’s blockchain spin-off, provides an independent blockchain network, that could be used to run coronavirus tests. Kadena was the first blockchain company to come out of JP Morgan’s Blockchain Center for Excellence and announced the full launch of its public blockchain in January 2020.

The company’s distributed app (Dapp) will be used to confirm the authenticity of coronavirus tests by using QR codes to track the kits from the manufacturer to the healthcare provider. The medical personnel can then use the QR code, the test kit information, and the patient’s test results to create a patient’s record. This record can be stored on Kadena’s blockchain which can be accessed anywhere.

In addition to ensuring data integrity, the Kadena App will also help researchers, academics, and government officials to understand the demographics of the spread of the disease. The Dapp is already available on Kadena’s testnet, and users with no prior knowledge of blockchain technology can use the app, developers who want to access the data stored on it can do so as well without using Kadena’s tokens or wallet.

Towards a COVID-19 free world

With the alarming rate of new cases, technological advancements have been emerging to help governments to detect new and record new cases. Chinese President Xi Jinping previously suggested that the fight against the new virus has highlighted the need for a better governance mechanism, suggesting blockchain technology should be integrated into the existing system to gain better insights into social circumstances.

The Public Health Blockchain Consortium (PHBC) has announced the launch of a monitoring blockchain aimed to verify communities and workplaces that are free from the coronavirus COVID-19, as well as other high-risk viruses, bacteria, and fungi. The Consortium consists of health authorities, universities, healthcare providers, and innovators who aim to collect and store anonymous health data on the blockchain, to improve the lives of people in the world. The blockchain monitor would help identify safe zones where there have been no confirmed cases of the coronavirus.

Blockchain-Focused Fund COSIMO X Acquires Seven-Figure Funding from RIT

COSIMO Ventures, an investment firm situated in Boston and Dublin, recently announced that the Rochester Institute of Technology (RIT) has endorsed them with a seven-figure investment.

The company disclosed in a recent securitized announcement with Blockchain.news that the venture capital firm was working on developing their new blockchain-focused tokenized trust, dubbed COSIMO X.

Managing Partner of COSIMO Ventures, Robert Frasca asserted that this was the first time any university in the United States had ever directly invested in a tokenized venture fund, making RIT the first university to hold a direct tokenized economic interest in a digital security firm. He also went on to express on behalf of COSIMO Ventures that with RIT’s funding, the investment firm hoped to achieve new heights of growth and breakthrough in the development of decentralized software protocols.

The Managing Partner also backed the newly instilled blockchain-focused tokenized fund—COSIMO X—and expressed this as a great opportunity of growth for his firm’s investors:

“We believe that the growth that we can foster as an investment firm will be what really resonates with our investors. Once the market fully understands the benefits of tokenization as it relates to fund investing, a structure like ours might become the market standard.”

Blockchain Future Powered by COSIMO X

COSIMO X, the blockchain-driven fund developed by COSIMO Ventures, is focused on investing in emerging businesses that utilize digital assets and blockchain protocols. Through these means, they hope to fuel and help the growth of the emerging digital economy. With exposure to companies working in regulatory technology industries, new digital asset creation sectors, and market infrastructure platforms, the COSIMO X fund is focused on utilizing financial technology as a tool to revolutionize and dominate the market.

COSIMO X Tokens, which are utilized on the blockchain platform, are representative of economic interest in the evergreen fund in this case and are found via the Securitize powered COSIMO X website. The tokens can be purchased by institutions, international investors, and US accredited investors.

Ethereum and Venture Capital

With fintech on the rise, startup companies that are funded by venture capital firms are integrating blockchain platforms more and more into their business ecosystem. As reported by Leadblock Partners, Ethereum seem to be a popular choice among European blockchain startups. Companies favor this particular blockchain network, because it offers robustness, scalability and overall stable architecture.

Texas Man Charged for Using COVID-19 Small Business Relief Funds to Buy Crypto

A Texas resident named Joshua Thomas Argires has been charged by US authorities for using funds from a COVID-19 relief program to trade cryptocurrencies.

The criminal charge was announced by Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. Argires was taken into custody for fraudulently securing more than $1.1 million in a Payment Protection Program (PPP) which he invested in a cryptocurrency account.

Violation of the CARES Act is a Crime

The Coronavirus Aid, Relief and Economic Security (CARES) Act is a Federal law enacted on March 29. It was enacted to help Small Business Administrators (SBA) to access emergency financial assistance to combat the negative economic effects of the COVID-19 pandemic. One major source of relief the CARES Act provides is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding. These funds were approved to be digitally distributed to qualifying small businesses back in April.

Joshua Argires is one of many US citizens that has been charged in recent times based on violations of the CARES Act. He claimed the funds through the companies Texas Barbecue and Houston Landscaping. According to the statement issued:

“Neither Texas Barbecue nor Houston Landscaping has employees or pays wages consistent with the amounts claimed in the PPP loan applications. The complaint further asserts that both of these loans were funded, but that none of the funds were used for payroll or other expenses authorized under the PPP. Rather, the funds received on behalf of Texas Barbecue were invested in a cryptocurrency account, while the funds obtained for Houston Landscaping were held in a bank account and slowly depleted via ATM withdrawals, according to the charges.”

Following these questionable allegations, Argires made his first appearance before the US Magistrate Judge Peter Bray on Monday.

Blockchain Firms Also Benefited From COVID-19 Relief Funds

Besides the role that blockchain technology is playing to help fight the COVID-19 pandemic, blockchain inventions were also considered as a potential channel for the disbursement of the funds. In addition to these, blockchain firms (particularly Tron) also benefited from the US government COVID-19 relief funds as it was awarded $2 million.

‘Big Four’ Tech Amazon, Google, Apple & Facebook Grilled During US Antitrust Hearing

In an antitrust hearing with the Judiciary Committee of US Congress, the CEOs of Amazon, Apple, Facebook and Google testified, as a continuation of an unfinished legal conversation with lawmakers.

Shots Fired By US Congress

Topics that were discussed ranged from data privacy breaches to investigations of the companies’ treatment of their competitors.

The CEO tech moguls have been on the watchlist of Capitol Hill for quite some time, as US law enforcement has been hoping to update regulatory policies revolving around the technology industry. The ‘Big Four’ tech firms have also been taking heat from US officials for a litany of legal concerns, that range from consumer privacy breaches to a failure to adequately regulating the content on their platforms.

Because of the ever-shifting nature of the tech sector and the heap of documents and interviews gathered to build this case, the interrogation played over the course of 6 hours. The CEOs were interrogated virtually due to the current pandemic and the logistics involved with it. The anti-trust hearing was deemed a rare occasion by many, making it one of the most anticipated tech-policy hearings of all times.

Lawsuits Against Tech Empires Pile Up

Commonly referred to as the “Big Four” in the tech industry, Amazon, Apple, Facebook and Google have been faced with heat from Capitol Hill on more than one occasion. In fact, US lawmakers have been looking to build a case pertaining to antitrust issues against them for quite some time.

The amount of lawsuits faced by the four tech multi-billion dollar companies have been heaping up and Congress can therefore no longer turn a blind eye. Complaints and lawsuits range from cryptocurrency ad breaches to abuse of their monopoly when dealing with competitors to putting their own personal gain over platform users’ rights. Earlier in the hearing, to defend his Facebook Company, CEO Mark Zuckerberg said:

“We compete hard. We compete fairly. We try to be the best.”

Facebook and Google Slapped With $600M Lawsuit

Earlier this month, Facebook and Google were served with a $600 million class-action lawsuit pertaining to a 2018 cryptocurrency ad ban. The lawsuit was filed by a group of cryptocurrency companies and individuals who claimed that the ban placed by these social media behemoths were hurting their businesses.

The lawsuit, which is a no-win-no-fee case, is currently awaiting funding for official filing as the companies and individuals that are allegedly affected are said to be expecting more firms to join their ranks in the legal battle.

Facebook Admitted to Regulatory Issues in 2019

This is just the first of many cases of regulatory issues that Facebook has encountered as it keeps on building its tech empire. Previously, when instilling Libra as a digital currency of their own, powered by a Facebook-created version of blockchain, the social media company had admitted that there were regulatory issues that needed to be addressed and that were preventing the progress of launching Libra officially.

In Facebook’s previous appeal with the US Securities and Exchange Commission, it mentioned that “there can be no assurance that Libra or our associated products and services will be made available in a timely manner.”

Amazon Admits

As for Amazon, the American multinational tech company has been accused of favoring their own products over that of third sellers on their website. They also faced accusations of misleading the committee.

Previously, the e-commerce behemoth had told law enforcement officials that it did not tap data from third-party sellers to boost their own products’ performance on the site. However, reports were brought up by Democratic Republican Pramila Jayapal that indicated the contrary.

This prompted Bezos to admit potential fault. It was reported that this was the first time he had ever testified in front of Congress. He said:

“What I can tell you is we have a policy against using seller-specific data to aid our private label business. But I can’t guarantee you that policy has never been violated.”

Apple Packs Less Heat

As for CEO of Apple, Tim Cook, the business mogul faced less heat than his counterparts. However, he was grilled on how his company handled its App Store. Lawmakers repeatedly brought up Apple’s policy that enables them to get a 30 percent commission on its in-app sales and subscriptions, a fee that has negatively impacted Spotify.

Facebook Launches Fintech Product Group F2 to Run Payments Across All its Apps

Facebook has expanded its fintech horizons and announced the launch of a new product group dedicated to payments purposes.

Introducing Facebook Financial

The new group, called Facebook Financial, or F2 by the internal team behind it, will direct all Facebook payments projects and regroup all of the platform’s ventures under one umbrella. The fintech project includes Facebook Pay, which is the social media company’s universal payment system. Facebook plans to incorporate it inside all of its apps.

Facebook implements payments project

Facebook Financial will be run by Facebook cryptocurrency Libra’s co-creator, David Marcus. In speaking about his company’s move on payments projects to Bloomberg, Marcus said, “We have a lot of commerce stuff going on across Facebook. It felt like it was the right thing to do to rationalize the strategy at a company level around all things payments.”

Facebook is seeking to improve its commerce and payments within the company, and across all apps that it owns, which include Instagram, Messenger and WhatsApp. Facebook CEO Mark Zuckerberg has publicly announced that he planning on integrating all of Facebook’s messaging services. The belief is that by making a payment system available across all apps, Facebook’s advertising will grow to be indispensable, which consequently will boost the amount of time that Facebook users spend on Instagram, Messenger, WhatsApp, and Facebook.

Rebranding of Libra’s crypto wallet

Libra co-creator Marcus appears to be the perfect person to direct the new payments project launched by Facebook, as he has been working for Facebook since 2014 and was formerly the president of PayPal Holdings Inc. The Facebook veteran has been hard at work in making Libra a cryptocurrency that can be used for cross border payments purposes.

With Facebook Financial, Facebook’s previous fintech ventures will all be integrated under one entity. Marcus will be managing the Novi wallet, which is simply a rebranding of Libra’s digital wallet Calibra- and he will be working on implementing a payment system on the WhatsApp messaging platform.

Fintech ventures by the bulk

Facebook has been trying to market WhatsApp payments services in India and Brazil. The company has been actively trying to branch out and integrate into those countries’ commercial market, but due to regulations, WhatsApp payments projects in India and Brazil have not yet been implemented.

Facebook CEO Zuckerberg is anticipating what its company’s new fintech venture. He said:

“As payments grow across Messenger and WhatsApp, and as we’re able to roll that out in more places, I think that that will only grow as a trend.”

It has been a busy year for Facebook, with Zuckerberg testifying recently in front of US Congress during an antitrust hearing. His company has been receiving backlash in relation to regulatory issues revolving around its native digital currency Libra. As reported by Blockchain.News, Libra was initially set to launch as a permissionless digital currency that was widely accessible to all. However, due to regulatory mishaps, the project has not been pursued nor approved, as Swiss Financial Markets Supervisory Authority (FINMA) regulators did not back the project, following a payment system license registration filed by Libra.

Marcus, who has been working on Libra for quite some time, appears to have just the expertise Facebook is looking for to not only navigate financial services policies, but to launch Facebook’s new F2 project off the ground.

What is VeChain?

VeChain was founded in Shanghai in 2015 by the former CIO of Luis Vuitton China, Sunny Lu. It is a blockchain platform designed to improve business processes and supply chain management via more efficient information sharing.

While many blockchains are purposed for financial gain through improving and marketing the underlying technology to attract investors for their cryptocurrency, VeChain’s value lies in serving existing businesses by providing blockchain-as-a-service (BaaS) via ToolChain, a platform that allows businesses to make use of their underlying blockchain.

VeChain aims to increase blockchain adoption by demonstrating to businesses the value that can be had by leveraging distributed ledger technology to enable a transparent information flow, efficient collaboration, and high-speed value transfer.

VeChain’s Blockchain

Initially launched on Ethereum’s blockchain, VeChain soon developed its own blockchain VeChainThor (VET) and rebranded in 2018.

The blockchain is based on a proof of authority (PoA) consensus protocol, whereby VeChain’s steering committee authorizes individual nodes, referred to as Authority Masternodes (AM), to update the chain. In order to become a validator or AM, one must disclose their identity, and therefore reputation, to ensure that they will act honestly.

Block producers are chosen randomly according to an algorithm based on AM’s VET holdings and KYC (identity disclosure). After each AM produces a version of the block, the block that has been approved the most by the others is chosen as the finalized version to be updated to the blockchain.

Governance is achieved by Masternodes in a centralized fashion, who retain voting privileges that allow them to vote on decisions affecting the blockchain. This system, therefore, combines a centralized voting protocol with a decentralized blockchain framework.

According to VeChain’s whitepaper, a PoA uses less bandwidth for faster transaction rates and is more scalable than other blockchain protocols.

Economic Model

Because cryptocurrency is inherent to blockchain technology, and businesses will have to pay to use VeChain’s blockchain-as-a-service platform, it is important to offset the effects of the currencies’ volatility so that businesses don’t have to worry about price fluctuations.

To create this buffer zone, VeChain created two tokens, VET and VeChain Thor Energy (VTHO). VET is a standard value-transfer token that can be used for trading, staking, and creating VTHO, while the latter is a “gas” that can be burned to perform transactions on the blockchain and to execute smart contracts. Having VET is necessary to generate VTHO, which is produced at a certain rate over time depending on how much VET one has. Basically, this means that conducting transactions on the blockchain is free, as long as you hold some VET and the amount of energy required is lower than the amount generated. However, to perform large transactions on the blockchain, such as running a DApp, one must hold a larger amount of VET.

VeChain’s “Business Consensus”: Value for Businesses and Use Cases

VeChain has supported businesses in agriculture, retail, energy, assurance, logistics, and the automobile industry.

The platform has helped track products from all stages of the supply chain, monitoring their quality, authenticity, transport medium, and even temperature, all the way from the manufacturing facility to the end customer, building trust between businesses, and allowing for greater market transparency.

To do this, VeChain uses Radio Frequency Identification (RFID) sensor tags that broadcast information onto the blockchain in real-time, allowing for greater quality control and customer service, and giving businesses and customers access to a products’ entire lifecycle.

VeChain has partnered with several big companies, including accounting giant Price Waterhouse Coopers, Jiangsu Electronics, and car company Renault.

In the automobile industry, for example, VeChain’s blockchain enables car brands to assign digital passports to individual vehicles to monitor their entire lifecycle, and to assess the quality and authenticity of all their separate parts.

The data acquired by VeChain is broadcast to the immutable blockchain, where it can be shared with third-parties like insurance companies who can use the data to set a suitable insurance rate for that driver, depending on their driving habits and overall maintenance of their car.

Conclusion

VeChain’s goal is to not only streamline and organize businesses’ data storage and supply chain management processes, but to also act as the central information storage and infrastructure hub of the Internet of Things (IoT) in the near future. The technical consensus of blockchain technology was the first phase, according to their white paper, then business consensus, and finally community consensus. VeChain is already in the second phase.