PBOC Moves Closer to Digital Currency: BTCManager’s Week in Review January 30
While Nasdaq successfully tested e-voting on the blockchain, China’s central bank and financial sector are eyeing the blockchain to leapfrog the rest of the world with this technology. The first trial of a blockchain-based system was announced by the PBOC as they hope to capture the ‘first-mover advantage’ with regards to a national digital currency. Also, a digital currency research institute was announced, due to launch in Spring 2017. Other countries who have also expressed interest in the concept of a digital currency are the UK, the US, and Senegal.
The Chinese central bank is meticulously studying the landscape before making any attempt to bring about real-world applications. But will the PBOC utilize Bitcoin’s blockchain, custom build their own one or go for a lesser-known ledger?
With a spectacular rise in the value of XEM against bitcoin since January 25, could this be related to the PBOC announcement? A report from China’s CERT, a non-governmental, non-profit cybersecurity technical center, released in early January showed that the NEM blockchain, which powers the altcoin XEM, is one of the most secure projects in existence. The chart below shows the high- and medium-level security threats that emerged from 25 blockchain projects. On the right-hand side, the red line indicates the number of vulnerabilities per 1,000 lines of code, with the figure for the NEM blockchain at 0.26.
According to a recent post by NEM.io Foundation, the NEM blockchain that powers the XEM cryptocurrency, will sometime later in 2017 “get our blockchain solution officially tested and certified in accordance to the International Standards Organisation and hopefully, be the first blockchain to do so.” Also, the announcement points to interest from central banks:
“NEM has been pretty active in East Asia, particularly in Japan, Malaysia, Korea and China. Together, we have generated more than a few hundred inquiries on our technology. We have interests ranging from central banks (digital fiat currency issuance), financial institutions… and a host of other industries.”
This week’s review is compiled from contributions by Christoph Bergmann, Evan Sixtin, Jamie Holmes, Nigel Dollentas and Tristan Johns.
The PBOC announced January 27 the completion of a successful trial run for a project regarding a digital bank acceptance exchange, making it the first central bank to come within grasp of testing its digital currency, or digital bill, and putting forward a real application for the blockchain. The trial was completed on December 15, with the purpose of the digital currency to handle transactions and settlements of bank acceptance bills utilizing a digital ledger.
Nasdaq, the second largest exchange in the world, has published findings of a trial on January 23 where blockchain technology was implemented for e-voting, announcing the Proof of Concept a “success” and shows that the technology behind Bitcoin is versatile, with applications beyond transaction settlements.
Some hundred investigators of Europol and Interpol have attended an international conference on money laundering and virtual currencies. The recommendations they worked out are substantial. “All countries are advised to consider the creation of the crime of unexplained wealth.” The existence of such a crime and “its usage as a predicate offense for the crime of money laundering” is considered as a key factor in fighting money laundering with digital currencies. Others may see it as a stroke against freedom.
After almost two years of negotiations and product restructuring, Xapo, “the Fort Knox of bitcoin” has achieved conditional approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate in Switzerland. Although subject to conditions, the approval marks the beginning of a new era of banking in Switzerland, offering a new type of digital financial intermediary to serve people, to compete with traditional fiat banks, and to create a less monopolistic, more democratized financial environment.
The interest in Bitcoin explodes in Africa’s biggest economy. The government cripples the regular remittance industry and remains unable to stop the devaluation of the domestic currency, the Nigerian naira. But shady investments and the famous Nigerian ‘princes’ might play a role; which is why the central bank has partially banned Bitcoin.
Tech entrepreneur and Internet activist Kim Dotcom delays Megaupload 2.0 as well as Bitcache, a supposed off-chain micropayment system utilizing the Bitcoin blockchain. Renowned Internet activist and tech entrepreneur Kim Dotcom has appeared multiple times in the public spotlight. He initially gained attention when his Internet creation Mega, an anonymous file-sharing service, was taken down by the United States government.
At the start of a new trading week, BTC-USD remains calm, obeying a $10 range in recent days. On the other hand, altcoins are showing heightened volatility. Two of our suggested buys, XEM and MAID, have gained substantially following our most recent cryptocurrency market outlook, up 21.0 percent and 13.8 percent respectively since Jan. 25.
Malta’s Ministry for Education and Employment (MEDE) is working with Learning Machine Group (LMG) to put University degrees and earned credentials on the Bitcoin blockchain using the Blockcerts open standard. The government of Malta issued a press release on January 24 stating that MEDE has signed a Memorandum of Understanding with LMG, signaling the intention of both parties to develop and implement a Malta pilot of LMG’s nation-state technology platform.