Banks Endorse Blockchain but Fight Bitcoin: BTCMANAGER’s Week in Review August 29
Compiled from contributions by JP Buntinx, Jamie Holmes, Michael Scott, Joseph Young and Nuno Menezes.
Last week saw the emergence of ‘utility settlement’ coin, which will run on distributed ledger technology and is the financial sector’s answer to bitcoin; the coin is backed by UBS, BNY Mellon, Deutsche Bank, and Santander. However, Brad Garlinghouse, President of Ripple, expressed doubts that this coin could compete with other cryptocurrencies like bitcoin. He argues, “…a bank-issued digital asset can only really efficiently settle between the banks who issued it.”
The blockchain consortium R3 also introduced their own blockchain specifically aimed at financial applications, known as ‘Corda’. The organization released a non-technical white paper outlining the concept. The use of smart contracts looks to replace decentralized consensus as a method of verifying transactions with the Corda blockchain, in contrast to bitcoin.
Monero (XMR) saw a huge jump in volume and value this week as two large darknet markets announced adoption of the privacy-focused cryptocurrency. Buying pressure has pushed the price of XMR-USD above $4.50, indicating buyers are in control. XMR-USD reached our first target at $10.30 and has since tempered to $9. Nevertheless, XMR-USD looks likely to trade between the $10-$15 range in the upcoming days, with our second target at $15.88.
Friday 2 September will see the latest numbers for the US labour market with the Non-Farm Payrolls, due 12:30 GMT. We should expect a rate hike to materialize in September if the number of new jobs added exceeds 180,000. BTC-USD would be exposed to the downside in this event as the markets price in a higher interest rate. The technicals point to bitcoin extending at least as low as $465.28 if the Fed move to raise rates at the September meeting.
BTCMANAGER got the chance to catch up with the family touring the US, educating and promoting the concept of cryptocurrencies. Known as the Bitcoin Bus, it’s the roving home for John Bush and Catherine Bleish, as well as their two children and two dogs. Michael Scott details their inspiring journey to encourage participation in a new, decentralized economy, one that is not at the mercy of the Federal Reserve.
The United Kingdom’s Financial Conduct Authority (FCA) recently announced that several groups developing consumer-facing and compliance products that use Blockchain technology are now going through a pre-approval stage. The FCA is now considering approving a “small but significant number of firms” using the Blockchain technology. The FCA’s director of strategy stated, “there may be areas where we might want to encourage it a bit.”
The Bank of Japan and the Reserve Bank of South Africa are the latest monetary authorities to express their optimism toward blockchain technology. The Reserve Bank of South Africa’s governor stated, “As a central bank, we are open to innovations despite the different opinions of regulators on matters such as cryptocurrencies”. Also, Bank of Japan governor Haruhiko Kuroda made a series of statements at an event at the Bank’s Fintech Center, highlighting the importance of blockchain-based services.