enterprise ethereum

ConsenSys Acquires US Brokerage Firm to Tokenize Outdated Municipal Bonds Market

Ethereum development studio ConsenSys is makinga move on the less glamorous and often-forgotten local municipal bond market. ConsenSys has recently acquired brokerage firm Heritage Financial Systems in an attempt to modernize the municipal bond market, which is notoriously error-prone and out-dated.

In an effort to place the traditional and inflexible municipal bonds market on the blockchain, ConsenSys intends to tokenize the $3.8 trillion municipal bonds market to allow local governments to raise funds and gain local investment more efficiently.

The role of blockchain

Municipal bonds have remained stuck in a kind of time warp. Challenges like liquidity, human errors in interest payouts, the inability to issue the bonds in smaller denominations, and inaccurate or slow information on current ownership.

Blockchain can fix these issues. Speaking to Bloomberg,Emma Channing, the coordinator for the deal with Heritage Financial systems, said,“It is a great use case for the technology. There is a strong demand and desire for more local engagement and more democratization of these kinds of muni offerings.”

Patrick Berarducci, global fintech head at ConsenSys, also mentioned, “The firm has a long track record of using blockchain. The technology could be applied to engage with local investors and make them get excited about their investments.”

The ConsenSys CodeFi software (a product suite, which develops customized decentralized applications and digitizes financial instruments) will enable the tokenization. The company aims to tokenize municipal bonds (munis) in smaller denominations to enable local residents to invest in community projects. The tokenization will also decrease the high cost of managing, distributing, and selling mini municipal bonds.

The blockchain would help to democratize the market, thus allowing ordinary citizens to participate. The technology would enable instant ownership checks and making investments in smaller denominations. For instance, blockchain will instantly verify if a citizen has invested in the bonds.

Municipal bonds are in high demand, but expensive

According to the report, it is not only expensive to manage and issue small bonds but also a multi-billion-dollar bond. These high costs prevent the scalability of mini municipal bonds because they pose barriers for smaller companies that want to enter the municipal bond market.

Despite the high costs, there is still a high demand as retail investors are looking for small bonds with smaller denominations. Such bonds assist in the development of community infrastructure projects.

The tokenization will, therefore, enable efficient management of the bond’s lifecycle and facilitate the scalability of small denominations bonds.

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Ethereum Continues to Grow in Use and Price in 2020, But Why?

The Ethereum blockchain has been a platform enabling new tokens’ initial life in cryptocurrency. Many developers use Ethereum as the go-to chain to create their business and tokenonomy (Token economy) before launching into the markets on exchanges and other services.

Already in 2020, the price has seen significant increases, rising from $120 to over $225 in under two months. But is there any reason why?

Coingecko: Ethereum Price from December 2019 — Feb 2020

In 2019, Ethereum decentralized apps (Dapps) showed huge advancements in popular segments including gaming and sports.

Following 2019’s growth, wallet holders have seen huge further increases during the start of 2020, with over 80% of new daily active wallets in use from Dapps as well as games and marketplace users jumping up a huge 163%.

Games are the most popular category on Ethereum’s decentralized marketplace, with the segment seeing a 7% increase in titles and new launches over the past months for players to enjoy.

The continued increase and interest in gaming alone is a huge reason why Ethereum continues to expand and attract new users. This could certainly be seen as to why the price has also seen steady rises. In January 2020 we can conclude that after a 7% increase so soon in the year, Ethereum is showing signs of real promise.

If Ethereum can continue to dominate gaming spaces and build on its marketplace, fighting off other platforms in the market, then 2020 could be a significant year for the cryptocurrency. Gaming, sports, and decentralized finance will be the driving factor as well as how the latest updates to the chain affect performance. The timing comes when the long-awaited Constantinople update will finally take place as well, creating quite the momentum for blockchain’s largest and robust platform.

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Ethereum’s Vitalik Buterin: Centralized Digital Currencies Without Privacy Are a Huge Step Back

Vitalik Buterin, the Ethereum co-founder, believes that mainstream adoption of digital currencies is inevitable, with or without blockchain, but will that currency be sovereign, corporate or decentralized?

Appearing on the Block TV podcast on March 4, Buterin said that central bank digital currencies (CBDC) and private stablecoins like Libra will exist in the near future but believes that non-inclusive “centralized chokepoints” of these institutional digital currencies will continue to steer adoption towards favouring decentralized cryptocurrency.

Challenges of Centralized Currency.

With each passing day, CBDC appears to be getting closer to realisation. Buterin believes these sovereign digital currencies will eventually see the light of day but highlighted the challenges these centralized projects will face. He explained the main problem is ”the concentration of power, the concentration or data collection — that you become dependent on potentially central intermediaries that can exercise a very fine-grained degree of control over who has the ability to participate in these systems and who can’t.”

Buterin alluded to the fact that these central controls or “chokepoints” allow the legacy institutions and sovereign infrastructures to exclude projects with little explanation. He said, “We’ve been seeing many situations where even things that are perfectly legal just end up getting restricted because whoever runs the centralized chokepoints just wants to exclude some category of users and I think those are reasons why people will continue to be interested in fully decentralized digital currency.” Facebook has recently taken a step back from Libra due to the regulatory backlash and pressure it has faced since the project was announced.

The Ethereum prodigy said that ultimately the market would lean towards decentralized currencies and that, “Centralized digital currencies without privacy are a huge step back” even more restrictive than our current systems of finance.

Enterprise Ethereum

During the earlier parts of the podcast, Buterin said that scaling on public blockchains is soon going to be able to properly serve the needs of global enterprises and adoption is already underway.

As reported by Blockchain.News yesterday, global accounting firm EY, have launched their open-source Baseline protocol which aims to address privacy issues to encourage enterprise adoption of public Ethereum.

According to the announcement on March 4, the Baseline Protocols aim is to empower enterprises to adopt the public Ethereum blockchain for complex and confidential processes, without storing sensitive data on-chain.

Baseline was created by EY in collaboration with technology giant Microsoft and ConsenSys and is specifically designed for enterprises to build on top of the Ethereum public blockchain. The protocol heavily leverages Zero-Knowledge Proofs (ZKP), a kind of encryption that is used to verify information without actually exposing the information.